Correlation Between Comstock Holding and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and Japan Tobacco at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Comstock Holding and Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comstock Holding Companies and Japan Tobacco ADR, you can compare the effects of market volatilities on Comstock Holding and Japan Tobacco and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Comstock Holding with a short position of Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and Japan Tobacco.
Diversification Opportunities for Comstock Holding and Japan Tobacco
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Comstock and Japan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Japan Tobacco ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco ADR and Comstock Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Comstock Holding Companies are associated (or correlated) with Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco ADR has no effect on the direction of Comstock Holding i.e., Comstock Holding and Japan Tobacco go up and down completely randomly.
Pair Corralation between Comstock Holding and Japan Tobacco
Given the investment horizon of 90 days Comstock Holding Companies is expected to under-perform the Japan Tobacco. In addition to that, Comstock Holding is 4.0 times more volatile than Japan Tobacco ADR. It trades about -0.22 of its total potential returns per unit of risk. Japan Tobacco ADR is currently generating about 0.06 per unit of volatility. If you would invest 1,343 in Japan Tobacco ADR on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Japan Tobacco ADR or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Holding Companies vs. Japan Tobacco ADR
Performance |
| Timeline |
| Comstock Holding Com |
| Japan Tobacco ADR |
Comstock Holding and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Holding and Japan Tobacco
The main advantage of trading using opposite Comstock Holding and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Japan Tobacco can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Japan Tobacco will offset losses from the drop in Japan Tobacco's long position.| Comstock Holding vs. Arhaus Inc | Comstock Holding vs. Floor Decor Holdings | Comstock Holding vs. Haverty Furniture Companies | Comstock Holding vs. Kingfisher plc |
| Japan Tobacco vs. Imperial Brands PLC | Japan Tobacco vs. RLX Technology | Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. Turning Point Brands |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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