Correlation Between Comstock Holding and Steven Madden

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

Diversification Opportunities for Comstock Holding and Steven Madden

0.37

Correlation Coefficient

Comstock Holding  Steven Madden

Weak diversification

The 3 months correlation between Comstock and Steven is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Comstock Holding i.e., Comstock Holding and Steven Madden go up and down completely randomly.

Pair Corralation between Comstock Holding and Steven Madden

Given the investment horizon of 90 days Comstock Holding Companies is expected to generate 2.81 times more return on investment than Steven Madden. However, Comstock Holding is 2.81 times more volatile than Steven Madden. It trades about 0.02 of its potential returns per unit of risk. Steven Madden is currently generating about -0.03 per unit of risk. If you would invest  860.00  in Comstock Holding Companies on September 15, 2024 and sell it today you would lose (20.00) from holding Comstock Holding Companies or give up 2.33% of portfolio value over 90 days.

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

Comstock Holding Companies  vs.  Steven Madden

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.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Comstock Holding and Steven Madden

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

The idea behind Comstock Holding Companies and Steven Madden 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..