Correlation Between Mammoth Energy and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both Mammoth Energy 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 Mammoth Energy and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Energy Services and Compass Diversified, you can compare the effects of market volatilities on Mammoth Energy 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 Mammoth Energy with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Energy and Compass Diversified.
Diversification Opportunities for Mammoth Energy and Compass Diversified
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mammoth and Compass is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mammoth Energy Services and Compass Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and Mammoth Energy 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 Mammoth Energy Services 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 Mammoth Energy i.e., Mammoth Energy and Compass Diversified go up and down completely randomly.
Pair Corralation between Mammoth Energy and Compass Diversified
Given the investment horizon of 90 days Mammoth Energy Services is expected to under-perform the Compass Diversified. In addition to that, Mammoth Energy is 4.18 times more volatile than Compass Diversified. It trades about -0.04 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 2,404 in Compass Diversified on November 2, 2024 and sell it today you would lose (54.00) from holding Compass Diversified or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mammoth Energy Services vs. Compass Diversified
Performance |
| Timeline |
| Mammoth Energy Services |
| Compass Diversified |
Mammoth Energy and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mammoth Energy and Compass Diversified
The main advantage of trading using opposite Mammoth Energy and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Energy 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.| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Brookfield Business Partners | Compass Diversified vs. Matthews International | Compass Diversified vs. Tejon Ranch Co |
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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