Correlation Between SoFi Next and Comstock Resources
Can any of the company-specific risk be diversified away by investing in both SoFi Next and Comstock 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 SoFi Next and Comstock Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Next 500 and Comstock Resources, you can compare the effects of market volatilities on SoFi Next and Comstock 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 SoFi Next with a short position of Comstock Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Next and Comstock Resources.
Diversification Opportunities for SoFi Next and Comstock Resources
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SoFi and Comstock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Next 500 and Comstock Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Resources and SoFi Next 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 SoFi Next 500 are associated (or correlated) with Comstock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Resources has no effect on the direction of SoFi Next i.e., SoFi Next and Comstock Resources go up and down completely randomly.
Pair Corralation between SoFi Next and Comstock Resources
Given the investment horizon of 90 days SoFi Next is expected to generate 7.18 times less return on investment than Comstock Resources. But when comparing it to its historical volatility, SoFi Next 500 is 4.16 times less risky than Comstock Resources. It trades about 0.21 of its potential returns per unit of risk. Comstock Resources is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,667 in Comstock Resources on October 23, 2024 and sell it today you would earn a total of 430.00 from holding Comstock Resources or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoFi Next 500 vs. Comstock Resources
Performance |
| Timeline |
| SoFi Next 500 |
| Comstock Resources |
SoFi Next and Comstock Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoFi Next and Comstock Resources
The main advantage of trading using opposite SoFi Next and Comstock Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Next position performs unexpectedly, Comstock 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 Comstock Resources will offset losses from the drop in Comstock Resources' long position.The idea behind SoFi Next 500 and Comstock Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Comstock Resources vs. Range Resources Corp | Comstock Resources vs. Permian Resources | Comstock Resources vs. EQT Corporation | Comstock Resources vs. Vital Energy |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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