Correlation Between Compass Minerals and Offerpad Solutions

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

Diversification Opportunities for Compass Minerals and Offerpad Solutions

0.46

Correlation Coefficient

Compass Minerals  Offerpad Solutions

Very weak diversification

The 3 months correlation between Compass and Offerpad is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions 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 Offerpad Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offerpad Solutions has no effect on the direction of Compass Minerals i.e., Compass Minerals and Offerpad Solutions go up and down completely randomly.

Pair Corralation between Compass Minerals and Offerpad Solutions

Considering the 90-day investment horizon Compass Minerals is expected to generate 69.62 times less return on investment than Offerpad Solutions. But when comparing it to its historical volatility, Compass Minerals International is 4.07 times less risky than Offerpad Solutions. It trades about 0.01 of its potential returns per unit of risk. Offerpad Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  108.00  in Offerpad Solutions on May 19, 2025 and sell it today you would earn a total of  35.00  from holding Offerpad Solutions or generate 32.41% return on investment over 90 days.

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

Compass Minerals International  vs.  Offerpad Solutions

Compass Minerals Int

Risk-Adjusted Performance

Weakest

Over the last 90 days Compass Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Compass Minerals is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Offerpad Solutions

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Offerpad Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Offerpad Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compass Minerals and Offerpad Solutions

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

The idea behind Compass Minerals International and Offerpad Solutions 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.