Correlation Between Compass Diversified and Leone Asset
Can any of the company-specific risk be diversified away by investing in both Compass Diversified and Leone Asset 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 Leone Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified Holdings and Leone Asset Management, you can compare the effects of market volatilities on Compass Diversified and Leone Asset 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 Leone Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and Leone Asset.
Diversification Opportunities for Compass Diversified and Leone Asset
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compass and Leone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and Leone Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leone Asset Management 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 Holdings are associated (or correlated) with Leone Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leone Asset Management has no effect on the direction of Compass Diversified i.e., Compass Diversified and Leone Asset go up and down completely randomly.
Pair Corralation between Compass Diversified and Leone Asset
Given the investment horizon of 90 days Compass Diversified is expected to generate 90.49 times less return on investment than Leone Asset. But when comparing it to its historical volatility, Compass Diversified Holdings is 45.25 times less risky than Leone Asset. It trades about 0.04 of its potential returns per unit of risk. Leone Asset Management is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.45 in Leone Asset Management on September 3, 2024 and sell it today you would lose (0.35) from holding Leone Asset Management or give up 77.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified Holdings vs. Leone Asset Management
Performance |
| Timeline |
| Compass Diversified |
| Leone Asset Management |
Compass Diversified and Leone Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and Leone Asset
The main advantage of trading using opposite Compass Diversified and Leone Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, Leone Asset 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 Leone Asset will offset losses from the drop in Leone Asset's long position.| Compass Diversified vs. Matthews International | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Valmont Industries | Compass Diversified vs. Brookfield Business Partners |
| Leone Asset vs. Honeywell International | Leone Asset vs. MDU Resources Group | Leone Asset vs. Compass Diversified Holdings | Leone Asset vs. Valmont Industries |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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