Correlation Between SM Prime and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both SM Prime 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 SM Prime and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Prime Holdings and Comstock Holding Companies, you can compare the effects of market volatilities on SM Prime 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 SM Prime with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Prime and Comstock Holding.
Diversification Opportunities for SM Prime and Comstock Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPHXF and Comstock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Prime 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 SM Prime 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 SM Prime 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 SM Prime i.e., SM Prime and Comstock Holding go up and down completely randomly.
Pair Corralation between SM Prime and Comstock Holding
Assuming the 90 days horizon SM Prime Holdings is expected to generate 2.8 times more return on investment than Comstock Holding. However, SM Prime is 2.8 times more volatile than Comstock Holding Companies. It trades about 0.04 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.05 per unit of risk. If you would invest 50.00 in SM Prime Holdings on September 2, 2024 and sell it today you would lose (4.00) from holding SM Prime Holdings or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 66.33% |
| Values | Daily Returns |
SM Prime Holdings vs. Comstock Holding Companies
Performance |
| Timeline |
| SM Prime Holdings |
| Comstock Holding Com |
SM Prime and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Prime and Comstock Holding
The main advantage of trading using opposite SM Prime and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Prime 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.The idea behind SM Prime Holdings and Comstock Holding Companies 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 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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