Correlation Between Marcus Millichap and Comstock Mining

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

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

Diversification Opportunities for Marcus Millichap and Comstock Mining

-0.33

Correlation Coefficient

Marcus Millichap  Comstock Mining

Very good diversification

The 3 months correlation between Marcus and Comstock is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Comstock Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Mining and Marcus Millichap 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 Marcus Millichap are associated (or correlated) with Comstock Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Mining has no effect on the direction of Marcus Millichap i.e., Marcus Millichap and Comstock Mining go up and down completely randomly.

Pair Corralation between Marcus Millichap and Comstock Mining

Considering the 90-day investment horizon Marcus Millichap is expected to generate 3.02 times less return on investment than Comstock Mining. But when comparing it to its historical volatility, Marcus Millichap is 4.2 times less risky than Comstock Mining. It trades about 0.13 of its potential returns per unit of risk. Comstock Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Comstock Mining on September 3, 2024 and sell it today you would earn a total of  17.00  from holding Comstock Mining or generate 73.91% return on investment over 90 days.

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

Marcus Millichap  vs.  Comstock Mining

Marcus Millichap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus Millichap are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Marcus Millichap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Comstock Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Mining are ranked lower than 7 (%) 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.

Pair Trading with Marcus Millichap and Comstock Mining

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

The idea behind Marcus Millichap and Comstock Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.