Correlation Between Comstock Holding and JD Sports

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

Diversification Opportunities for Comstock Holding and JD Sports

0.54

Correlation Coefficient

Comstock Holding  JD Sports

Very weak diversification

The 3 months correlation between Comstock and JDSPY is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Comstock Holding i.e., Comstock Holding and JD Sports go up and down completely randomly.

Pair Corralation between Comstock Holding and JD Sports

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 0.85 times more return on investment than JD Sports. However, Comstock Holding Companies is 1.18 times less risky than JD Sports. It trades about -0.1 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.13 per unit of risk. If you would invest  843.00  in Comstock Holding Companies on December 1, 2024 and sell it today you would lose (141.00) from holding Comstock Holding Companies or give up 16.73% of portfolio value over 90 days.

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

Comstock Holding Companies  vs.  JD Sports Fashion

Comstock Holding Com

Risk-Adjusted Performance

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

JD Sports Fashion

Risk-Adjusted Performance

Very Weak

Over the last 90 days JD Sports Fashion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Comstock Holding and JD Sports

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

The idea behind Comstock Holding Companies and JD Sports Fashion 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.