Correlation Between Comstock Holding and ENEL Societa

Can any of the company-specific risk be diversified away by investing in both Comstock Holding and ENEL Societa 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 ENEL Societa 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 ENEL Societa per, you can compare the effects of market volatilities on Comstock Holding and ENEL Societa 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 ENEL Societa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and ENEL Societa.

Diversification Opportunities for Comstock Holding and ENEL Societa

0.7

Correlation Coefficient

Comstock Holding  ENEL Societa

Poor diversification

The 3 months correlation between Comstock and ENEL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and ENEL Societa per in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEL Societa per 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 ENEL Societa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEL Societa per has no effect on the direction of Comstock Holding i.e., Comstock Holding and ENEL Societa go up and down completely randomly.

Pair Corralation between Comstock Holding and ENEL Societa

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 3.06 times more return on investment than ENEL Societa. However, Comstock Holding is 3.06 times more volatile than ENEL Societa per. It trades about 0.06 of its potential returns per unit of risk. ENEL Societa per is currently generating about 0.05 per unit of risk. If you would invest  384.00  in Comstock Holding Companies on September 29, 2024 and sell it today you would earn a total of  398.00  from holding Comstock Holding Companies or generate 103.65% return on investment over 90 days.

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

Comstock Holding Companies  vs.  ENEL Societa per

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 unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ENEL Societa per

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENEL Societa per has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Comstock Holding and ENEL Societa

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

The idea behind Comstock Holding Companies and ENEL Societa per 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.