Correlation Between Origin Investment and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both Origin Investment 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 Origin Investment and Compass Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Investment Corp and Compass Diversified Holdings, you can compare the effects of market volatilities on Origin Investment 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 Origin Investment with a short position of Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Investment and Compass Diversified.
Diversification Opportunities for Origin Investment and Compass Diversified
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Compass is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Origin Investment Corp and Compass Diversified Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified and Origin Investment 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 Origin Investment Corp 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 Origin Investment i.e., Origin Investment and Compass Diversified go up and down completely randomly.
Pair Corralation between Origin Investment and Compass Diversified
Assuming the 90 days horizon Origin Investment is expected to generate 17.92 times less return on investment than Compass Diversified. But when comparing it to its historical volatility, Origin Investment Corp is 14.38 times less risky than Compass Diversified. It trades about 0.15 of its potential returns per unit of risk. Compass Diversified Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,425 in Compass Diversified Holdings on May 31, 2025 and sell it today you would earn a total of 369.00 from holding Compass Diversified Holdings or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.13% |
| Values | Daily Returns |
Origin Investment Corp vs. Compass Diversified Holdings
Performance |
| Timeline |
| Origin Investment Corp |
| Compass Diversified |
Origin Investment and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Investment and Compass Diversified
The main advantage of trading using opposite Origin Investment and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Investment 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.| Origin Investment vs. Net Lease Office | Origin Investment vs. Air Lease | Origin Investment vs. Federal Home Loan | Origin Investment vs. GATX Corporation |
| Compass Diversified vs. Drilling Tools International | Compass Diversified vs. Viemed Healthcare | Compass Diversified vs. Vantage Drilling International | Compass Diversified vs. Tenaris SA ADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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