Correlation Between Steel Partners and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both Steel Partners and Compass Diversified 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 Steel Partners and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Partners Holdings and Compass Diversified, you can compare the effects of market volatilities on Steel Partners and Compass Diversified 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 Steel Partners with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Partners and Compass Diversified.
Diversification Opportunities for Steel Partners and Compass Diversified
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Compass is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and Compass Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and Steel Partners 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 Steel Partners Holdings are associated (or correlated) with Compass Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of Steel Partners i.e., Steel Partners and Compass Diversified go up and down completely randomly.
Pair Corralation between Steel Partners and Compass Diversified
Given the investment horizon of 90 days Steel Partners is expected to generate 2.28 times less return on investment than Compass Diversified. In addition to that, Steel Partners is 1.66 times more volatile than Compass Diversified. It trades about 0.01 of its total potential returns per unit of risk. Compass Diversified is currently generating about 0.02 per unit of volatility. If you would invest 2,095 in Compass Diversified on August 28, 2024 and sell it today you would earn a total of 205.00 from holding Compass Diversified or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Partners Holdings vs. Compass Diversified
Performance |
| Timeline |
| Steel Partners Holdings |
| Compass Diversified |
Steel Partners and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Partners and Compass Diversified
The main advantage of trading using opposite Steel Partners and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Partners position performs unexpectedly, Compass Diversified 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 Compass Diversified will offset losses from the drop in Compass Diversified's long position.| Steel Partners vs. Vast Renewables Limited | Steel Partners vs. 1847 Holdings LLC | Steel Partners vs. Westport Fuel Systems | Steel Partners vs. Brookfield Business Partners |
| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Tejon Ranch Co | Compass Diversified vs. Brookfield Business Partners |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |