Correlation Between Comstock Holding and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and SIMS METAL 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 SIMS METAL 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 SIMS METAL MGT, you can compare the effects of market volatilities on Comstock Holding and SIMS METAL 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 SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and SIMS METAL.
Diversification Opportunities for Comstock Holding and SIMS METAL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Comstock and SIMS is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and SIMS METAL MGT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMS METAL MGT 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 SIMS METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMS METAL MGT has no effect on the direction of Comstock Holding i.e., Comstock Holding and SIMS METAL go up and down completely randomly.
Pair Corralation between Comstock Holding and SIMS METAL
Assuming the 90 days trading horizon Comstock Holding Companies is expected to generate 1.71 times more return on investment than SIMS METAL. However, Comstock Holding is 1.71 times more volatile than SIMS METAL MGT. It trades about 0.07 of its potential returns per unit of risk. SIMS METAL MGT is currently generating about 0.05 per unit of risk. If you would invest 590.00 in Comstock Holding Companies on September 27, 2024 and sell it today you would earn a total of 165.00 from holding Comstock Holding Companies or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Holding Companies vs. SIMS METAL MGT
Performance |
| Timeline |
| Comstock Holding Com |
| SIMS METAL MGT |
Comstock Holding and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Holding and SIMS METAL
The main advantage of trading using opposite Comstock Holding and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, SIMS METAL 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 SIMS METAL will offset losses from the drop in SIMS METAL's long position.| Comstock Holding vs. SIMS METAL MGT | Comstock Holding vs. United Utilities Group | Comstock Holding vs. Evolution Mining Limited | Comstock Holding vs. Aluminum of |
| SIMS METAL vs. Charoen Pokphand Foods | SIMS METAL vs. TYSON FOODS A | SIMS METAL vs. Seven West Media | SIMS METAL vs. Flutter Entertainment PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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