Correlation Between Comstock Capital and First Foundation

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

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

Diversification Opportunities for Comstock Capital and First Foundation

0.86

Correlation Coefficient

Comstock Capital  First Foundation

Very poor diversification

The 3 months correlation between Comstock and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Capital Value and First Foundation Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Foundation Fixed and Comstock Capital 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 Capital Value are associated (or correlated) with First Foundation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Foundation Fixed has no effect on the direction of Comstock Capital i.e., Comstock Capital and First Foundation go up and down completely randomly.

Pair Corralation between Comstock Capital and First Foundation

Assuming the 90 days horizon Comstock Capital Value is expected to generate 1.07 times more return on investment than First Foundation. However, Comstock Capital is 1.07 times more volatile than First Foundation Fixed. It trades about 0.3 of its potential returns per unit of risk. First Foundation Fixed is currently generating about 0.07 per unit of risk. If you would invest  417.00  in Comstock Capital Value on April 30, 2025 and sell it today you would earn a total of  22.00  from holding Comstock Capital Value or generate 5.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Comstock Capital Value  vs.  First Foundation Fixed

Comstock Capital Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Capital Value are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. 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.

First Foundation Fixed

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Foundation Fixed are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, First Foundation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Comstock Capital and First Foundation

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

The idea behind Comstock Capital Value and First Foundation Fixed 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.