Correlation Between Comstock Holding and LION ONE
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and LION ONE 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 LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on Comstock Holding and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and LION ONE.
Diversification Opportunities for Comstock Holding and LION ONE
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comstock and LION is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Comstock Holding i.e., Comstock Holding and LION ONE go up and down completely randomly.
Pair Corralation between Comstock Holding and LION ONE
Assuming the 90 days trading horizon Comstock Holding Companies is expected to generate 0.88 times more return on investment than LION ONE. However, Comstock Holding Companies is 1.14 times less risky than LION ONE. It trades about 0.06 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.07 per unit of risk. If you would invest 442.00 in Comstock Holding Companies on September 26, 2024 and sell it today you would earn a total of 313.00 from holding Comstock Holding Companies or generate 70.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Holding Companies vs. LION ONE METALS
Performance |
| Timeline |
| Comstock Holding Com |
| LION ONE METALS |
Comstock Holding and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Holding and LION ONE
The main advantage of trading using opposite Comstock Holding and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Comstock Holding vs. LION ONE METALS | Comstock Holding vs. COPLAND ROAD CAPITAL | Comstock Holding vs. MCEWEN MINING INC | Comstock Holding vs. KENNAMETAL INC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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