Correlation Between Compass Diversified and Cresud SACIF
Can any of the company-specific risk be diversified away by investing in both Compass Diversified and Cresud SACIF 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 Diversified and Cresud SACIF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified and Cresud SACIF y, you can compare the effects of market volatilities on Compass Diversified and Cresud SACIF 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 Diversified with a short position of Cresud SACIF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and Cresud SACIF.
Diversification Opportunities for Compass Diversified and Cresud SACIF
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compass and Cresud is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y and Compass Diversified 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 Diversified are associated (or correlated) with Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of Compass Diversified i.e., Compass Diversified and Cresud SACIF go up and down completely randomly.
Pair Corralation between Compass Diversified and Cresud SACIF
Assuming the 90 days trading horizon Compass Diversified is expected to generate 7.2 times less return on investment than Cresud SACIF. But when comparing it to its historical volatility, Compass Diversified is 2.68 times less risky than Cresud SACIF. It trades about 0.03 of its potential returns per unit of risk. Cresud SACIF y is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Cresud SACIF y on September 1, 2024 and sell it today you would earn a total of 508.00 from holding Cresud SACIF y or generate 74.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified vs. Cresud SACIF y
Performance |
| Timeline |
| Compass Diversified |
| Cresud SACIF y |
Compass Diversified and Cresud SACIF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and Cresud SACIF
The main advantage of trading using opposite Compass Diversified and Cresud SACIF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, Cresud SACIF 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 Cresud SACIF will offset losses from the drop in Cresud SACIF's long position.| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Brookfield Business Partners | Compass Diversified vs. Matthews International | Compass Diversified vs. Tejon Ranch Co |
| Cresud SACIF vs. Griffon | Cresud SACIF vs. Matthews International | Cresud SACIF vs. Valmont Industries | Cresud SACIF vs. Steel Partners Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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