Correlation Between Floor Decor and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both Floor Decor 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 Floor Decor and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and Comstock Holding Companies, you can compare the effects of market volatilities on Floor Decor 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 Floor Decor with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Comstock Holding.
Diversification Opportunities for Floor Decor and Comstock Holding
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Floor and Comstock is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings 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 Floor Decor 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 Floor Decor Holdings 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 Floor Decor i.e., Floor Decor and Comstock Holding go up and down completely randomly.
Pair Corralation between Floor Decor and Comstock Holding
Considering the 90-day investment horizon Floor Decor Holdings is expected to generate 0.66 times more return on investment than Comstock Holding. However, Floor Decor Holdings is 1.51 times less risky than Comstock Holding. It trades about 0.18 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about -0.22 per unit of risk. If you would invest 10,184 in Floor Decor Holdings on August 29, 2024 and sell it today you would earn a total of 1,291 from holding Floor Decor Holdings or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. Comstock Holding Companies
Performance |
| Timeline |
| Floor Decor Holdings |
| Comstock Holding Com |
Floor Decor and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and Comstock Holding
The main advantage of trading using opposite Floor Decor and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor 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.| Floor Decor vs. Arhaus Inc | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Kirklands | Floor Decor vs. Haverty Furniture Companies |
| Comstock Holding vs. Arhaus Inc | Comstock Holding vs. Floor Decor Holdings | Comstock Holding vs. Haverty Furniture Companies | Comstock Holding vs. Kingfisher plc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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