Compass Diversified Correlations

CODI-P-A

17.73 0.19 1.08%

The current 90-days correlation between Compass Diversified and NVIDIA is -0.06 (i.e., Good diversification). The correlation of Compass Diversified is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

Compass Diversified Correlation With Market

Significant diversification

The correlation between Compass Diversified Holdings and DJI is 0.07 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and DJI in the same portfolio, assuming nothing else is changed.

The ability to find closely correlated positions to Compass Diversified could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Compass Diversified when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Compass Diversified - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Compass Diversified Holdings to buy it.

Moving together with Compass Preferred Stock

0.7	LNDAF	Lnea Directa Aseguradora	Pair Corr
0.72	INTC	Intel	Pair Corr
0.68	DD	Dupont De Nemours	Pair Corr
0.77	MMM	3M Company Sell-off Trend	Pair Corr
0.67	JPM	JPMorgan Chase	Pair Corr
0.63	CSCO	Cisco Systems	Pair Corr
0.67	PFE	Pfizer Inc Aggressive Push	Pair Corr

Moving against Compass Preferred Stock

0.63	BMYMP	Bristol Myers Squibb	Pair Corr
0.46	PG	Procter Gamble	Pair Corr

Related Correlations Analysis

	NVDA	MSFT	AAPL	GOOG	AMZN	BMYMP	META	AVGO
NVDA		0.93	0.73	0.75	0.75	-0.46	0.78	0.92	NVDA
MSFT	0.93		0.54	0.6	0.63	-0.56	0.8	0.83	MSFT
AAPL	0.73	0.54		0.89	0.7	-0.19	0.68	0.83	AAPL
GOOG	0.75	0.6	0.89		0.72	-0.25	0.67	0.86	GOOG
AMZN	0.75	0.63	0.7	0.72		-0.38	0.48	0.73	AMZN
BMYMP	-0.46	-0.56	-0.19	-0.25	-0.38		-0.39	-0.37	BMYMP
META	0.78	0.8	0.68	0.67	0.48	-0.39		0.79	META
AVGO	0.92	0.83	0.83	0.86	0.73	-0.37	0.79		AVGO
	NVDA	MSFT	AAPL	GOOG	AMZN	BMYMP	META	AVGO

Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

MSFT	+ 0.93	NVDA
AVGO	+ 0.92	NVDA
GOOG	+ 0.89	AAPL
AVGO	+ 0.86	GOOG
AVGO	+ 0.83	MSFT
AVGO	+ 0.83	AAPL

High negative correlations

BMYMP	- 0.56	MSFT
BMYMP	- 0.46	NVDA
META	- 0.39	BMYMP
BMYMP	- 0.38	AMZN
AVGO	- 0.37	BMYMP
BMYMP	- 0.25	GOOG

Risk-Adjusted Indicators

There is a big difference between Compass Preferred Stock performing well and Compass Diversified Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Compass Diversified's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
NVDA	1.25	0.19	0.10	0.37	1.40	(1.38)	2.59	(2.70)	7.83
MSFT	0.72	0.06	0.01	0.24	0.76	(0.80)	1.58	(1.47)	5.71
AAPL	0.99	0.18	0.15	0.32	0.77	(1.17)	3.18	(1.69)	7.06
GOOG	1.12	0.46	0.34	0.76	0.72	(1.36)	3.01	(1.66)	8.34
AMZN	1.20	0.09	0.05	0.18	1.69	(1.23)	2.86	(1.84)	11.12
BMYMP	0.98	(0.24)	0.00	(0.36)	0.00	0.00	1.91	(4.85)	13.26
META	1.34	0.11	0.08	0.22	1.20	(1.62)	3.15	(2.27)	14.28
AVGO	1.61	0.37	0.16	0.72	1.78	(1.77)	3.15	(3.55)	7.90

Compass Diversified Related Equities

One of the popular trading techniques among algorithmic traders is to use market-neutral strategies where every trade hedges away some risk. Because there are two separate transactions required, even if one position performs unexpectedly, the other equity can make up some of the losses. Below are some of the equities that can be combined with Compass Diversified preferred stock to make a market-neutral strategy. Peer analysis of Compass Diversified could also be used in its relative valuation, which is a method of valuing Compass Diversified by comparing valuation metrics with similar companies.

NVIDIA Microsoft Apple Inc Alphabet Inc Class C Amazon Inc Bristol Myers Squibb Meta Platforms Broadcom American Airlines Group Alcoa Corp Apple Inc Best Buy Co Citigroup SentinelOne CVS Health Corp

Risk & Return

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