Correlation Between Compass Diversified and One Valley

Can any of the company-specific risk be diversified away by investing in both Compass Diversified and One Valley 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 Diversified and One Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compass Diversified Holdings and One Valley Bancorp, you can compare the effects of market volatilities on Compass Diversified and One Valley 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 Diversified with a short position of One Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and One Valley.

Diversification Opportunities for Compass Diversified and One Valley

0.0

Correlation Coefficient

Compass Diversified  One Valley

Pay attention - limited upside

The 3 months correlation between Compass and One is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and One Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Valley Bancorp and Compass Diversified 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 Diversified Holdings are associated (or correlated) with One Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Valley Bancorp has no effect on the direction of Compass Diversified i.e., Compass Diversified and One Valley go up and down completely randomly.

Pair Corralation between Compass Diversified and One Valley

If you would invest  2,393  in Compass Diversified Holdings on October 25, 2024 and sell it today you would earn a total of  37.00  from holding Compass Diversified Holdings or generate 1.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Compass Diversified Holdings  vs.  One Valley Bancorp

Compass Diversified

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Diversified Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Compass Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

One Valley Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days One Valley Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, One Valley is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Compass Diversified and One Valley

The main advantage of trading using opposite Compass Diversified and One Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified position performs unexpectedly, One Valley 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 One Valley will offset losses from the drop in One Valley's long position.

The idea behind Compass Diversified Holdings and One Valley Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.