Correlation Between Comstock Holding and St Joe

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

Diversification Opportunities for Comstock Holding and St Joe

0.19

Correlation Coefficient

Comstock Holding  St Joe

Average diversification

The 3 months correlation between Comstock and JOE is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and St Joe Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Joe Company 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 St Joe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Joe Company has no effect on the direction of Comstock Holding i.e., Comstock Holding and St Joe go up and down completely randomly.

Pair Corralation between Comstock Holding and St Joe

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 2.97 times more return on investment than St Joe. However, Comstock Holding is 2.97 times more volatile than St Joe Company. It trades about 0.11 of its potential returns per unit of risk. St Joe Company is currently generating about 0.06 per unit of risk. If you would invest  803.00  in Comstock Holding Companies on December 28, 2024 and sell it today you would earn a total of  221.00  from holding Comstock Holding Companies or generate 27.52% 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.  St Joe Company

Comstock Holding Com

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 8 (%) 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.

St Joe Company

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in St Joe Company are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, St Joe is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Comstock Holding and St Joe

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

The idea behind Comstock Holding Companies and St Joe Company 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.