Correlation Between Comstock Mining and Opendoor Technologies

Can any of the company-specific risk be diversified away by investing in both Comstock Mining and Opendoor Technologies 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 Mining and Opendoor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comstock Mining and Opendoor Technologies, you can compare the effects of market volatilities on Comstock Mining and Opendoor Technologies 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 Mining with a short position of Opendoor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Mining and Opendoor Technologies.

Diversification Opportunities for Comstock Mining and Opendoor Technologies

0.04

Correlation Coefficient

Comstock Mining  Opendoor Technologies

Significant diversification

The 3 months correlation between Comstock and Opendoor is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Mining and Opendoor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opendoor Technologies and Comstock Mining 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 Mining are associated (or correlated) with Opendoor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opendoor Technologies has no effect on the direction of Comstock Mining i.e., Comstock Mining and Opendoor Technologies go up and down completely randomly.

Pair Corralation between Comstock Mining and Opendoor Technologies

Given the investment horizon of 90 days Comstock Mining is expected to generate 2.36 times more return on investment than Opendoor Technologies. However, Comstock Mining is 2.36 times more volatile than Opendoor Technologies. It trades about 0.06 of its potential returns per unit of risk. Opendoor Technologies is currently generating about 0.01 per unit of risk. If you would invest  35.00  in Comstock Mining on November 20, 2024 and sell it today you would earn a total of  0.00  from holding Comstock Mining or generate 0.0% return on investment over 90 days.

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

Comstock Mining  vs.  Opendoor Technologies

Comstock Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Comstock Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Opendoor Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Opendoor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Opendoor Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Comstock Mining and Opendoor Technologies

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

The idea behind Comstock Mining and Opendoor Technologies 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.

Check out your portfolio center.

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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.