Correlation Between Compass Minerals and Ioneer

Can any of the company-specific risk be diversified away by investing in both Compass Minerals and Ioneer 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 Ioneer 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 ioneer, you can compare the effects of market volatilities on Compass Minerals and Ioneer 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 Ioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Minerals and Ioneer.

Diversification Opportunities for Compass Minerals and Ioneer

-0.12

Correlation Coefficient

Compass Minerals  Ioneer

Good diversification

The 3 months correlation between Compass and Ioneer is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and ioneer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer 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 Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer has no effect on the direction of Compass Minerals i.e., Compass Minerals and Ioneer go up and down completely randomly.

Pair Corralation between Compass Minerals and Ioneer

Considering the 90-day investment horizon Compass Minerals International is expected to generate 0.55 times more return on investment than Ioneer. However, Compass Minerals International is 1.82 times less risky than Ioneer. It trades about 0.16 of its potential returns per unit of risk. ioneer is currently generating about -0.01 per unit of risk. If you would invest  1,423  in Compass Minerals International on May 7, 2025 and sell it today you would earn a total of  617.00  from holding Compass Minerals International or generate 43.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compass Minerals International  vs.  ioneer

Compass Minerals Int

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Minerals International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Compass Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

ioneer

Risk-Adjusted Performance

Weakest

Over the last 90 days ioneer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ioneer is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Compass Minerals and Ioneer

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

The idea behind Compass Minerals International and ioneer 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.