Correlation Between Compass Diversified and Fossil Group
Can any of the company-specific risk be diversified away by investing in both Compass Diversified and Fossil Group 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 Fossil Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified and Fossil Group 7, you can compare the effects of market volatilities on Compass Diversified and Fossil Group 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 Fossil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and Fossil Group.
Diversification Opportunities for Compass Diversified and Fossil Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compass and Fossil is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified and Fossil Group 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group 7 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 Fossil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group 7 has no effect on the direction of Compass Diversified i.e., Compass Diversified and Fossil Group go up and down completely randomly.
Pair Corralation between Compass Diversified and Fossil Group
Assuming the 90 days trading horizon Compass Diversified is expected to generate 66.4 times less return on investment than Fossil Group. But when comparing it to its historical volatility, Compass Diversified is 6.26 times less risky than Fossil Group. It trades about 0.01 of its potential returns per unit of risk. Fossil Group 7 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 942.00 in Fossil Group 7 on August 28, 2024 and sell it today you would earn a total of 383.00 from holding Fossil Group 7 or generate 40.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified vs. Fossil Group 7
Performance |
| Timeline |
| Compass Diversified |
| Fossil Group 7 |
Compass Diversified and Fossil Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and Fossil Group
The main advantage of trading using opposite Compass Diversified and Fossil Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, Fossil Group 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 Fossil Group will offset losses from the drop in Fossil Group's long position.| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Tejon Ranch Co | Compass Diversified vs. Brookfield Business Partners |
| Fossil Group vs. Atlanticus Holdings | Fossil Group vs. Harrow Health 8625 | Fossil Group vs. Greenidge Generation Holdings | Fossil Group vs. Ramaco Resources, |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |