Correlation Between Comstock Resources and Granite Ridge
Can any of the company-specific risk be diversified away by investing in both Comstock Resources and Granite Ridge 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 Resources and Granite Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comstock Resources and Granite Ridge Resources, you can compare the effects of market volatilities on Comstock Resources and Granite Ridge 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 Resources with a short position of Granite Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Resources and Granite Ridge.
Diversification Opportunities for Comstock Resources and Granite Ridge
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comstock and Granite is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Resources and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge Resources and Comstock Resources 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 Resources are associated (or correlated) with Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of Comstock Resources i.e., Comstock Resources and Granite Ridge go up and down completely randomly.
Pair Corralation between Comstock Resources and Granite Ridge
Considering the 90-day investment horizon Comstock Resources is expected to generate 2.06 times more return on investment than Granite Ridge. However, Comstock Resources is 2.06 times more volatile than Granite Ridge Resources. It trades about -0.17 of its potential returns per unit of risk. Granite Ridge Resources is currently generating about -0.37 per unit of risk. If you would invest 1,962 in Comstock Resources on November 9, 2024 and sell it today you would lose (201.00) from holding Comstock Resources or give up 10.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Resources vs. Granite Ridge Resources
Performance |
| Timeline |
| Comstock Resources |
| Granite Ridge Resources |
Comstock Resources and Granite Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Resources and Granite Ridge
The main advantage of trading using opposite Comstock Resources and Granite Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Resources position performs unexpectedly, Granite Ridge 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 Granite Ridge will offset losses from the drop in Granite Ridge's long position.| Comstock Resources vs. Range Resources Corp | Comstock Resources vs. Permian Resources | Comstock Resources vs. EQT Corporation | Comstock Resources vs. Vital Energy |
| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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