Correlation Between Comstock Resources and Matador Resources
Can any of the company-specific risk be diversified away by investing in both Comstock Resources and Matador Resources 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 Matador Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comstock Resources and Matador Resources, you can compare the effects of market volatilities on Comstock Resources and Matador Resources 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 Matador Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Resources and Matador Resources.
Diversification Opportunities for Comstock Resources and Matador Resources
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comstock and Matador is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Resources and Matador Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matador 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 Matador Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matador Resources has no effect on the direction of Comstock Resources i.e., Comstock Resources and Matador Resources go up and down completely randomly.
Pair Corralation between Comstock Resources and Matador Resources
Considering the 90-day investment horizon Comstock Resources is expected to generate 1.73 times more return on investment than Matador Resources. However, Comstock Resources is 1.73 times more volatile than Matador Resources. It trades about 0.33 of its potential returns per unit of risk. Matador Resources is currently generating about 0.33 per unit of risk. If you would invest 1,194 in Comstock Resources on August 28, 2024 and sell it today you would earn a total of 357.00 from holding Comstock Resources or generate 29.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Resources vs. Matador Resources
Performance |
| Timeline |
| Comstock Resources |
| Matador Resources |
Comstock Resources and Matador Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Resources and Matador Resources
The main advantage of trading using opposite Comstock Resources and Matador Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Resources position performs unexpectedly, Matador Resources 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 Matador Resources will offset losses from the drop in Matador Resources' long position.| Comstock Resources vs. ConocoPhillips | Comstock Resources vs. Occidental Petroleum | Comstock Resources vs. Permian Resources | Comstock Resources vs. EOG Resources |
| Matador Resources vs. Murphy Oil | Matador Resources vs. Civitas Resources | Matador Resources vs. Permian Resources | Matador Resources vs. Antero Resources Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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