Correlation Between Compass Minerals and Materion
Can any of the company-specific risk be diversified away by investing in both Compass Minerals and Materion 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 Materion 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 Materion, you can compare the effects of market volatilities on Compass Minerals and Materion 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 Materion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Minerals and Materion.
Diversification Opportunities for Compass Minerals and Materion
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compass and Materion is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion 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 Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Compass Minerals i.e., Compass Minerals and Materion go up and down completely randomly.
Pair Corralation between Compass Minerals and Materion
Considering the 90-day investment horizon Compass Minerals is expected to generate 15.6 times less return on investment than Materion. But when comparing it to its historical volatility, Compass Minerals International is 1.04 times less risky than Materion. It trades about 0.01 of its potential returns per unit of risk. Materion is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,849 in Materion on September 3, 2025 and sell it today you would earn a total of 1,361 from holding Materion or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Minerals International vs. Materion
Performance |
| Timeline |
| Compass Minerals Int |
| Materion |
Compass Minerals and Materion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Minerals and Materion
The main advantage of trading using opposite Compass Minerals and Materion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Minerals position performs unexpectedly, Materion 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 Materion will offset losses from the drop in Materion's long position.| Compass Minerals vs. New Oriental Education | Compass Minerals vs. B Communications | Compass Minerals vs. Wireless Xcessories Group | Compass Minerals vs. Education Management Corp |
| Materion vs. G III Apparel Group | Materion vs. Urban Outfitters | Materion vs. Broadstone Net Lease | Materion vs. First Ship Lease |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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