Correlation Between US GoldMining and Compass Minerals
Can any of the company-specific risk be diversified away by investing in both US GoldMining and Compass Minerals 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 US GoldMining and Compass Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US GoldMining Warrant and Compass Minerals International, you can compare the effects of market volatilities on US GoldMining and Compass Minerals 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 US GoldMining with a short position of Compass Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of US GoldMining and Compass Minerals.
Diversification Opportunities for US GoldMining and Compass Minerals
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USGOW and Compass is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Warrant and Compass Minerals International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Minerals Int and US GoldMining 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 US GoldMining Warrant are associated (or correlated) with Compass Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Minerals Int has no effect on the direction of US GoldMining i.e., US GoldMining and Compass Minerals go up and down completely randomly.
Pair Corralation between US GoldMining and Compass Minerals
Assuming the 90 days horizon US GoldMining Warrant is expected to under-perform the Compass Minerals. In addition to that, US GoldMining is 2.45 times more volatile than Compass Minerals International. It trades about -0.01 of its total potential returns per unit of risk. Compass Minerals International is currently generating about 0.3 per unit of volatility. If you would invest 964.00 in Compass Minerals International on March 22, 2025 and sell it today you would earn a total of 974.00 from holding Compass Minerals International or generate 101.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
US GoldMining Warrant vs. Compass Minerals International
Performance |
| Timeline |
| US GoldMining Warrant |
| Compass Minerals Int |
US GoldMining and Compass Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US GoldMining and Compass Minerals
The main advantage of trading using opposite US GoldMining and Compass Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US GoldMining position performs unexpectedly, Compass Minerals 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 Minerals will offset losses from the drop in Compass Minerals' long position.| US GoldMining vs. Simon Property Group | US GoldMining vs. SEI Investments | US GoldMining vs. Rogers | US GoldMining vs. The Mosaic |
| Compass Minerals vs. Skeena Resources | Compass Minerals vs. Materion | Compass Minerals vs. IperionX Limited American | Compass Minerals vs. EMX Royalty Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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