Correlation Between Comstock Holding and Goodman

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

Diversification Opportunities for Comstock Holding and Goodman

0.15

Correlation Coefficient

Comstock Holding  Goodman

Average diversification

The 3 months correlation between Comstock and Goodman is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Goodman Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodman Group 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 Goodman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodman Group has no effect on the direction of Comstock Holding i.e., Comstock Holding and Goodman go up and down completely randomly.

Pair Corralation between Comstock Holding and Goodman

Given the investment horizon of 90 days Comstock Holding Companies is expected to under-perform the Goodman. But the stock apears to be less risky and, when comparing its historical volatility, Comstock Holding Companies is 1.26 times less risky than Goodman. The stock trades about -0.08 of its potential returns per unit of risk. The Goodman Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,163  in Goodman Group on October 11, 2024 and sell it today you would earn a total of  90.00  from holding Goodman Group or generate 4.16% return on investment over 90 days.

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

Comstock Holding Companies  vs.  Goodman Group

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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Goodman Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodman Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Comstock Holding and Goodman

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

The idea behind Comstock Holding Companies and Goodman Group 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.