Correlation Between Microsoft and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Comstock Holding Companies, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Comstock Holding.
Diversification Opportunities for Microsoft and Comstock Holding
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microsoft and Comstock is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Comstock Holding go up and down completely randomly.
Pair Corralation between Microsoft and Comstock Holding
Given the investment horizon of 90 days Microsoft is expected to generate 0.24 times more return on investment than Comstock Holding. However, Microsoft is 4.14 times less risky than Comstock Holding. It trades about 0.2 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about -0.08 per unit of risk. If you would invest 41,493 in Microsoft on September 19, 2024 and sell it today you would earn a total of 2,246 from holding Microsoft or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. Comstock Holding Companies
Performance |
| Timeline |
| Microsoft |
| Comstock Holding Com |
Microsoft and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Comstock Holding
The main advantage of trading using opposite Microsoft and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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