Correlation Between Amgen and Comstock Holding

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

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

Diversification Opportunities for Amgen and Comstock Holding

0.67

Correlation Coefficient

Amgen  Comstock Holding

Poor diversification

The 3 months correlation between Amgen and Comstock is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc 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 Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Comstock Holding go up and down completely randomly.

Pair Corralation between Amgen and Comstock Holding

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Comstock Holding. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.57 times less risky than Comstock Holding. The stock trades about -0.09 of its potential returns per unit of risk. The Comstock Holding Companies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  640.00  in Comstock Holding Companies on September 23, 2024 and sell it today you would earn a total of  179.00  from holding Comstock Holding Companies or generate 27.97% return on investment over 90 days.

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

Amgen Inc  vs.  Comstock Holding Companies

Amgen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Comstock Holding Com

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comstock Holding Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Amgen and Comstock Holding

The main advantage of trading using opposite Amgen and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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 Amgen Inc 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.