Correlation Between Columbus McKinnon and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Compass Diversified 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 Columbus McKinnon and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Compass Diversified Holdings, you can compare the effects of market volatilities on Columbus McKinnon and Compass Diversified 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 Columbus McKinnon with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Compass Diversified.
Diversification Opportunities for Columbus McKinnon and Compass Diversified
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Columbus and Compass is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Compass Diversified Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and Columbus McKinnon 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 Columbus McKinnon are associated (or correlated) with Compass Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Compass Diversified go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Compass Diversified
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 1.42 times more return on investment than Compass Diversified. However, Columbus McKinnon is 1.42 times more volatile than Compass Diversified Holdings. It trades about -0.04 of its potential returns per unit of risk. Compass Diversified Holdings is currently generating about -0.16 per unit of risk. If you would invest 3,694 in Columbus McKinnon on November 6, 2024 and sell it today you would lose (52.00) from holding Columbus McKinnon or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Compass Diversified Holdings
Performance |
| Timeline |
| Columbus McKinnon |
| Compass Diversified |
Columbus McKinnon and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Compass Diversified
The main advantage of trading using opposite Columbus McKinnon and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Compass Diversified 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 Diversified will offset losses from the drop in Compass Diversified's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
| Compass Diversified vs. Inter Parfums | Compass Diversified vs. MYR Group | Compass Diversified vs. Skechers USA | Compass Diversified vs. Titan International |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |