Correlation Between Comstock Holding and Andretti Acquisition

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

Diversification Opportunities for Comstock Holding and Andretti Acquisition

0.26

Correlation Coefficient

Comstock Holding  Andretti Acquisition

Modest diversification

The 3 months correlation between Comstock and Andretti is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Andretti Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andretti Acquisition Corp 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 Andretti Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andretti Acquisition Corp has no effect on the direction of Comstock Holding i.e., Comstock Holding and Andretti Acquisition go up and down completely randomly.

Pair Corralation between Comstock Holding and Andretti Acquisition

Given the investment horizon of 90 days Comstock Holding Companies is expected to under-perform the Andretti Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Comstock Holding Companies is 6.54 times less risky than Andretti Acquisition. The stock trades about -0.05 of its potential returns per unit of risk. The Andretti Acquisition Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Andretti Acquisition Corp on September 19, 2024 and sell it today you would earn a total of  7.00  from holding Andretti Acquisition Corp or generate 77.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Comstock Holding Companies  vs.  Andretti Acquisition Corp

Comstock Holding Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Andretti Acquisition Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Andretti Acquisition Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Andretti Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comstock Holding and Andretti Acquisition

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

The idea behind Comstock Holding Companies and Andretti Acquisition Corp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.