Correlation Between Compass Diversified and New York
Can any of the company-specific risk be diversified away by investing in both Compass Diversified and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified and New York Mortgage, you can compare the effects of market volatilities on Compass Diversified and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and New York.
Diversification Opportunities for Compass Diversified and New York
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compass and New is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Compass Diversified i.e., Compass Diversified and New York go up and down completely randomly.
Pair Corralation between Compass Diversified and New York
Assuming the 90 days trading horizon Compass Diversified is expected to under-perform the New York. In addition to that, Compass Diversified is 1.39 times more volatile than New York Mortgage. It trades about -0.38 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.12 per unit of volatility. If you would invest 2,475 in New York Mortgage on August 28, 2024 and sell it today you would earn a total of 18.00 from holding New York Mortgage or generate 0.73% 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. New York Mortgage
Performance |
| Timeline |
| Compass Diversified |
| New York Mortgage |
Compass Diversified and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and New York
The main advantage of trading using opposite Compass Diversified and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, New York 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 New York will offset losses from the drop in New York'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 |
| New York vs. New York Mortgage | New York vs. AGNC Investment Corp | New York vs. Chimera Investment | New York vs. AGNC Investment Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |