Correlation Between Comstock Holding and Movado

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

Diversification Opportunities for Comstock Holding and Movado

0.16

Correlation Coefficient

Comstock Holding  Movado

Average diversification

The 3 months correlation between Comstock and Movado is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Movado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movado 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 Movado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movado Group has no effect on the direction of Comstock Holding i.e., Comstock Holding and Movado go up and down completely randomly.

Pair Corralation between Comstock Holding and Movado

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 2.55 times more return on investment than Movado. However, Comstock Holding is 2.55 times more volatile than Movado Group. It trades about 0.08 of its potential returns per unit of risk. Movado Group is currently generating about -0.11 per unit of risk. If you would invest  803.00  in Comstock Holding Companies on December 29, 2024 and sell it today you would earn a total of  146.00  from holding Comstock Holding Companies or generate 18.18% 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.  Movado Group

Comstock Holding Com

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Comstock Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Movado Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movado Group 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 stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Comstock Holding and Movado

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

The idea behind Comstock Holding Companies and Movado 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.

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