Correlation Between Federated Prudent and Comstock Capital

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

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

Diversification Opportunities for Federated Prudent and Comstock Capital

-0.54

Correlation Coefficient

Federated Prudent  Comstock Capital

Excellent diversification

The 3 months correlation between Federated and Comstock is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear and Comstock Capital Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Capital Value and Federated Prudent 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 Federated Prudent Bear are associated (or correlated) with Comstock Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Capital Value has no effect on the direction of Federated Prudent i.e., Federated Prudent and Comstock Capital go up and down completely randomly.

Pair Corralation between Federated Prudent and Comstock Capital

Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the Comstock Capital. In addition to that, Federated Prudent is 2.05 times more volatile than Comstock Capital Value. It trades about -0.21 of its total potential returns per unit of risk. Comstock Capital Value is currently generating about -0.09 per unit of volatility. If you would invest  396.00  in Comstock Capital Value on March 8, 2024 and sell it today you would lose (2.00) from holding Comstock Capital Value or give up 0.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Federated Prudent Bear  vs.  Comstock Capital Value

Federated Prudent Bear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Prudent Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Federated Prudent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Comstock Capital Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comstock Capital Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Comstock Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federated Prudent and Comstock Capital

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

The idea behind Federated Prudent Bear and Comstock Capital Value 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.