Correlation Between BAIYU Holdings and Compass Minerals
Can any of the company-specific risk be diversified away by investing in both BAIYU Holdings and Compass Minerals 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 BAIYU Holdings and Compass Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIYU Holdings and Compass Minerals International, you can compare the effects of market volatilities on BAIYU Holdings and Compass Minerals 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 BAIYU Holdings with a short position of Compass Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIYU Holdings and Compass Minerals.
Diversification Opportunities for BAIYU Holdings and Compass Minerals
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BAIYU and Compass is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BAIYU Holdings and Compass Minerals International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Minerals Int and BAIYU Holdings 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 BAIYU Holdings are associated (or correlated) with Compass Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Minerals Int has no effect on the direction of BAIYU Holdings i.e., BAIYU Holdings and Compass Minerals go up and down completely randomly.
Pair Corralation between BAIYU Holdings and Compass Minerals
Considering the 90-day investment horizon BAIYU Holdings is expected to under-perform the Compass Minerals. In addition to that, BAIYU Holdings is 2.63 times more volatile than Compass Minerals International. It trades about -0.08 of its total potential returns per unit of risk. Compass Minerals International is currently generating about -0.05 per unit of volatility. If you would invest 3,812 in Compass Minerals International on November 2, 2024 and sell it today you would lose (2,642) from holding Compass Minerals International or give up 69.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.69% |
| Values | Daily Returns |
BAIYU Holdings vs. Compass Minerals International
Performance |
| Timeline |
| BAIYU Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Compass Minerals Int |
BAIYU Holdings and Compass Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIYU Holdings and Compass Minerals
The main advantage of trading using opposite BAIYU Holdings and Compass Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIYU Holdings position performs unexpectedly, Compass Minerals 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 Compass Minerals will offset losses from the drop in Compass Minerals' long position.| BAIYU Holdings vs. Regeneron Pharmaceuticals | BAIYU Holdings vs. Delek Logistics Partners | BAIYU Holdings vs. Catalyst Pharmaceuticals | BAIYU Holdings vs. I Mab |
| Compass Minerals vs. Skeena Resources | Compass Minerals vs. Materion | Compass Minerals vs. IperionX Limited American | Compass Minerals vs. EMX Royalty Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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