Correlation Between Comstock Holding and Amgen
Can any of the company-specific risk be diversified away by investing in both Comstock Holding and Amgen 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 Amgen 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 Amgen Inc, you can compare the effects of market volatilities on Comstock Holding and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Holding and Amgen.
Diversification Opportunities for Comstock Holding and Amgen
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comstock and Amgen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Comstock Holding i.e., Comstock Holding and Amgen go up and down completely randomly.
Pair Corralation between Comstock Holding and Amgen
Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 2.85 times more return on investment than Amgen. However, Comstock Holding is 2.85 times more volatile than Amgen Inc. It trades about -0.02 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.19 per unit of risk. If you would invest 925.00 in Comstock Holding Companies on September 24, 2024 and sell it today you would lose (106.00) from holding Comstock Holding Companies or give up 11.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Comstock Holding Companies vs. Amgen Inc
Performance |
Timeline |
Comstock Holding Com |
Amgen Inc |
Comstock Holding and Amgen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Comstock Holding and Amgen
The main advantage of trading using opposite Comstock Holding and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.Comstock Holding vs. TRI Pointe Homes | Comstock Holding vs. Meritage | Comstock Holding vs. Taylor Morn Home | Comstock Holding vs. Hovnanian Enterprises |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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