Correlation Between Compass Minerals and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Compass Minerals and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Compass Minerals and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Minerals and Eskay Mining.
Diversification Opportunities for Compass Minerals and Eskay Mining
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compass and Eskay is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Compass Minerals i.e., Compass Minerals and Eskay Mining go up and down completely randomly.
Pair Corralation between Compass Minerals and Eskay Mining
Considering the 90-day investment horizon Compass Minerals International is expected to generate 0.64 times more return on investment than Eskay Mining. However, Compass Minerals International is 1.55 times less risky than Eskay Mining. It trades about -0.04 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.04 per unit of risk. If you would invest 3,476 in Compass Minerals International on August 31, 2024 and sell it today you would lose (1,933) from holding Compass Minerals International or give up 55.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Minerals International vs. Eskay Mining Corp
Performance |
| Timeline |
| Compass Minerals Int |
| Eskay Mining Corp |
Compass Minerals and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Minerals and Eskay Mining
The main advantage of trading using opposite Compass Minerals and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Minerals position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Compass Minerals vs. Skeena Resources | Compass Minerals vs. Materion | Compass Minerals vs. IperionX Limited American | Compass Minerals vs. EMX Royalty Corp |
| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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