Correlation Between Comstock Holding and Carsales
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on Comstock Holding and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and Carsales.
Diversification Opportunities for Comstock Holding and Carsales
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Comstock and Carsales is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of Comstock Holding i.e., Comstock Holding and Carsales go up and down completely randomly.
Pair Corralation between Comstock Holding and Carsales
Assuming the 90 days trading horizon Comstock Holding Companies is expected to generate 2.58 times more return on investment than Carsales. However, Comstock Holding is 2.58 times more volatile than Carsales. It trades about 0.07 of its potential returns per unit of risk. Carsales is currently generating about 0.08 per unit of risk. If you would invest 398.00 in Comstock Holding Companies on September 19, 2024 and sell it today you would earn a total of 337.00 from holding Comstock Holding Companies or generate 84.67% 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. Carsales
Performance |
| Timeline |
| Comstock Holding Com |
| Carsales |
Comstock Holding and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Holding and Carsales
The main advantage of trading using opposite Comstock Holding and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Comstock Holding vs. GRUPO CARSO A1 | Comstock Holding vs. Elmos Semiconductor SE | Comstock Holding vs. Carsales | Comstock Holding vs. 24SEVENOFFICE GROUP AB |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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