Correlation Between Comstock Holding and Link Real

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

Diversification Opportunities for Comstock Holding and Link Real

0.38

Correlation Coefficient

Comstock Holding  Link Real

Weak diversification

The 3 months correlation between Comstock and Link is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Link Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Real Estate 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 Link Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Real Estate has no effect on the direction of Comstock Holding i.e., Comstock Holding and Link Real go up and down completely randomly.

Pair Corralation between Comstock Holding and Link Real

Given the investment horizon of 90 days Comstock Holding Companies is expected to under-perform the Link Real. But the stock apears to be less risky and, when comparing its historical volatility, Comstock Holding Companies is 1.15 times less risky than Link Real. The stock trades about -0.1 of its potential returns per unit of risk. The Link Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  429.00  in Link Real Estate on December 1, 2024 and sell it today you would earn a total of  29.00  from holding Link Real Estate or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	73.33%
Values	Daily Returns

Comstock Holding Companies  vs.  Link Real Estate

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.

Link Real Estate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Link Real Estate are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Link Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Comstock Holding and Link Real

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

The idea behind Comstock Holding Companies and Link Real Estate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.