Correlation Between Compass Minerals and Atlas Lithium
Can any of the company-specific risk be diversified away by investing in both Compass Minerals and Atlas Lithium 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 Compass Minerals and Atlas Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Minerals International and Atlas Lithium, you can compare the effects of market volatilities on Compass Minerals and Atlas Lithium 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 Compass Minerals with a short position of Atlas Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Minerals and Atlas Lithium.
Diversification Opportunities for Compass Minerals and Atlas Lithium
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compass and Atlas is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Atlas Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Lithium and Compass Minerals 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 Compass Minerals International are associated (or correlated) with Atlas Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Lithium has no effect on the direction of Compass Minerals i.e., Compass Minerals and Atlas Lithium go up and down completely randomly.
Pair Corralation between Compass Minerals and Atlas Lithium
Considering the 90-day investment horizon Compass Minerals International is expected to generate 1.35 times more return on investment than Atlas Lithium. However, Compass Minerals is 1.35 times more volatile than Atlas Lithium. It trades about 0.1 of its potential returns per unit of risk. Atlas Lithium is currently generating about -0.37 per unit of risk. If you would invest 1,385 in Compass Minerals International on August 28, 2024 and sell it today you would earn a total of 122.00 from holding Compass Minerals International or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Compass Minerals International vs. Atlas Lithium
Performance |
| Timeline |
| Compass Minerals Int |
| Atlas Lithium |
Compass Minerals and Atlas Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Minerals and Atlas Lithium
The main advantage of trading using opposite Compass Minerals and Atlas Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Minerals position performs unexpectedly, Atlas Lithium 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 Atlas Lithium will offset losses from the drop in Atlas Lithium's long position.| Compass Minerals vs. Vale SA ADR | Compass Minerals vs. Teck Resources Ltd | Compass Minerals vs. BHP Group Limited | Compass Minerals vs. Glencore PLC ADR |
| Atlas Lithium vs. SilverCrest Metals | Atlas Lithium vs. New Pacific Metals | Atlas Lithium vs. Endeavour Silver Corp | Atlas Lithium vs. McEwen Mining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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