Correlation Between Comstock Holding and One Liberty

Can any of the company-specific risk be diversified away by investing in both Comstock Holding and One Liberty 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 Comstock Holding and One Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comstock Holding Companies and One Liberty Properties, you can compare the effects of market volatilities on Comstock Holding and One Liberty 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 Comstock Holding with a short position of One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and One Liberty.

Diversification Opportunities for Comstock Holding and One Liberty

0.26

Correlation Coefficient

Comstock Holding  One Liberty

Modest diversification

The 3 months correlation between Comstock and One is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties and Comstock Holding 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 Comstock Holding Companies are associated (or correlated) with One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Comstock Holding i.e., Comstock Holding and One Liberty go up and down completely randomly.

Pair Corralation between Comstock Holding and One Liberty

Given the investment horizon of 90 days Comstock Holding Companies is expected to under-perform the One Liberty. In addition to that, Comstock Holding is 2.84 times more volatile than One Liberty Properties. It trades about -0.04 of its total potential returns per unit of risk. One Liberty Properties is currently generating about 0.12 per unit of volatility. If you would invest  2,740  in One Liberty Properties on August 24, 2024 and sell it today you would earn a total of  119.00  from holding One Liberty Properties or generate 4.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Comstock Holding Companies  vs.  One Liberty Properties

Comstock Holding Com

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Comstock Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

One Liberty Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One Liberty Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, One Liberty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Comstock Holding and One Liberty

The main advantage of trading using opposite Comstock Holding and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty's long position.

The idea behind Comstock Holding Companies and One Liberty Properties 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.