Correlation Between Comstock Holding and Natural Alternatives

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

Diversification Opportunities for Comstock Holding and Natural Alternatives

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Comstock and Natural is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives 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 Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of Comstock Holding i.e., Comstock Holding and Natural Alternatives go up and down completely randomly.

Pair Corralation between Comstock Holding and Natural Alternatives

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 1.17 times more return on investment than Natural Alternatives. However, Comstock Holding is 1.17 times more volatile than Natural Alternatives International. It trades about 0.09 of its potential returns per unit of risk. Natural Alternatives International is currently generating about -0.14 per unit of risk. If you would invest  757.00  in Comstock Holding Companies on September 6, 2024 and sell it today you would earn a total of  162.00  from holding Comstock Holding Companies or generate 21.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Comstock Holding Companies  vs.  Natural Alternatives Internati

 Performance 
       Timeline  
Comstock Holding Com 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
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 unsteady fundamental indicators, Comstock Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Natural Alternatives 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Natural Alternatives International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Comstock Holding and Natural Alternatives Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comstock Holding and Natural Alternatives

The main advantage of trading using opposite Comstock Holding and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.
The idea behind Comstock Holding Companies and Natural Alternatives International 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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