Correlation Between Coffee Holding and Comstock Resources
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Comstock Resources 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 Coffee Holding and Comstock Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Comstock Resources, you can compare the effects of market volatilities on Coffee Holding and Comstock Resources 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 Coffee Holding with a short position of Comstock Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Comstock Resources.
Diversification Opportunities for Coffee Holding and Comstock Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coffee and Comstock is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Comstock Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Resources and Coffee 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 Coffee Holding Co are associated (or correlated) with Comstock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Resources has no effect on the direction of Coffee Holding i.e., Coffee Holding and Comstock Resources go up and down completely randomly.
Pair Corralation between Coffee Holding and Comstock Resources
Considering the 90-day investment horizon Coffee Holding Co is expected to under-perform the Comstock Resources. But the stock apears to be less risky and, when comparing its historical volatility, Coffee Holding Co is 1.03 times less risky than Comstock Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Comstock Resources is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,581 in Comstock Resources on September 3, 2025 and sell it today you would earn a total of 1,068 from holding Comstock Resources or generate 67.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Comstock Resources
Performance |
| Timeline |
| Coffee Holding |
| Comstock Resources |
Coffee Holding and Comstock Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Comstock Resources
The main advantage of trading using opposite Coffee Holding and Comstock Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Comstock Resources 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 Resources will offset losses from the drop in Comstock Resources' long position.| Coffee Holding vs. CarsalesCom Ltd ADR | Coffee Holding vs. Plaza Retail REIT | Coffee Holding vs. Pacific Online Limited | Coffee Holding vs. H2O Retailing |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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