Correlation Between Compass Minerals and Coloplast
Can any of the company-specific risk be diversified away by investing in both Compass Minerals and Coloplast 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 Minerals and Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Minerals International and Coloplast A, you can compare the effects of market volatilities on Compass Minerals and Coloplast 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 Minerals with a short position of Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Minerals and Coloplast.
Diversification Opportunities for Compass Minerals and Coloplast
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compass and Coloplast is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Coloplast A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A and Compass Minerals 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 Minerals International are associated (or correlated) with Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A has no effect on the direction of Compass Minerals i.e., Compass Minerals and Coloplast go up and down completely randomly.
Pair Corralation between Compass Minerals and Coloplast
Considering the 90-day investment horizon Compass Minerals International is expected to generate 1.71 times more return on investment than Coloplast. However, Compass Minerals is 1.71 times more volatile than Coloplast A. It trades about 0.12 of its potential returns per unit of risk. Coloplast A is currently generating about -0.07 per unit of risk. If you would invest 1,904 in Compass Minerals International on April 1, 2025 and sell it today you would earn a total of 99.00 from holding Compass Minerals International or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Compass Minerals International vs. Coloplast A
Performance |
| Timeline |
| Compass Minerals Int |
| Coloplast A |
Compass Minerals and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Minerals and Coloplast
The main advantage of trading using opposite Compass Minerals and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Minerals position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| Compass Minerals vs. Lithium Americas Corp | Compass Minerals vs. Vale SA ADR | Compass Minerals vs. BHP Group Limited | Compass Minerals vs. Rio Tinto ADR |
| Coloplast vs. BioLife Sciences | Coloplast vs. CeCors Inc | Coloplast vs. GlucoTrack | Coloplast vs. Sharps Technology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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