Correlation Between Dow Jones and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Comstock Holding 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 Dow Jones and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Comstock Holding Companies, you can compare the effects of market volatilities on Dow Jones and Comstock Holding 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 Dow Jones with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Comstock Holding.
Diversification Opportunities for Dow Jones and Comstock Holding
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Comstock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Dow Jones i.e., Dow Jones and Comstock Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Comstock Holding
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.09 times less return on investment than Comstock Holding. But when comparing it to its historical volatility, Dow Jones Industrial is 5.06 times less risky than Comstock Holding. It trades about 0.08 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Comstock Holding Companies on September 19, 2024 and sell it today you would earn a total of 155.00 from holding Comstock Holding Companies or generate 26.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Dow Jones Industrial vs. Comstock Holding Companies
Performance |
| Timeline |
Dow Jones and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Comstock Holding Companies
Pair trading matchups for Comstock Holding
Pair Trading with Dow Jones and Comstock Holding
The main advantage of trading using opposite Dow Jones and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.| Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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