Correlation Between SpareBank and Comstock Holding

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

By analyzing existing cross correlation between SpareBank 1 SR Bank and Comstock Holding Companies, you can compare the effects of market volatilities on SpareBank and Comstock Holding 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 SpareBank with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpareBank and Comstock Holding.

Diversification Opportunities for SpareBank and Comstock Holding

0.0

Correlation Coefficient

SpareBank  Comstock Holding

Pay attention - limited upside

The 3 months correlation between SpareBank and Comstock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SpareBank 1 SR Bank and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com and SpareBank 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 SpareBank 1 SR Bank are associated (or correlated) with Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of SpareBank i.e., SpareBank and Comstock Holding go up and down completely randomly.

Pair Corralation between SpareBank and Comstock Holding

Assuming the 90 days horizon SpareBank 1 SR Bank is expected to generate 1.55 times more return on investment than Comstock Holding. However, SpareBank is 1.55 times more volatile than Comstock Holding Companies. It trades about 0.06 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.06 per unit of risk. If you would invest  715.00  in SpareBank 1 SR Bank on September 21, 2024 and sell it today you would earn a total of  750.00  from holding SpareBank 1 SR Bank or generate 104.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	62.63%
Values	Daily Returns

SpareBank 1 SR Bank  vs.  Comstock Holding Companies

SpareBank 1 SR

Risk-Adjusted Performance

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Very Weak

Over the last 90 days SpareBank 1 SR Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, SpareBank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Comstock Holding Com

Risk-Adjusted Performance

0 of 100

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 fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SpareBank and Comstock Holding

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

The idea behind SpareBank 1 SR Bank and Comstock Holding Companies 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.