Correlation Between Compass Diversified and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Compass Diversified and Mammoth Energy 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 Mammoth Energy 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 Mammoth Energy Services, you can compare the effects of market volatilities on Compass Diversified and Mammoth Energy 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 Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and Mammoth Energy.
Diversification Opportunities for Compass Diversified and Mammoth Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compass and Mammoth is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services 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 Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Compass Diversified i.e., Compass Diversified and Mammoth Energy go up and down completely randomly.
Pair Corralation between Compass Diversified and Mammoth Energy
Given the investment horizon of 90 days Compass Diversified Holdings is expected to generate 0.47 times more return on investment than Mammoth Energy. However, Compass Diversified Holdings is 2.13 times less risky than Mammoth Energy. It trades about 0.02 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about -0.04 per unit of risk. If you would invest 2,086 in Compass Diversified Holdings on November 2, 2024 and sell it today you would earn a total of 37.00 from holding Compass Diversified Holdings or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified Holdings vs. Mammoth Energy Services
Performance |
| Timeline |
| Compass Diversified |
| Mammoth Energy Services |
Compass Diversified and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and Mammoth Energy
The main advantage of trading using opposite Compass Diversified and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, Mammoth Energy 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 Mammoth Energy will offset losses from the drop in Mammoth Energy'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 |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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