Correlation Between Compass Minerals and Skeena Resources

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

Diversification Opportunities for Compass Minerals and Skeena Resources

0.0

Correlation Coefficient

Compass Minerals  Skeena Resources

Pay attention - limited upside

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

Pair Corralation between Compass Minerals and Skeena Resources

Considering the 90-day investment horizon Compass Minerals International is expected to under-perform the Skeena Resources. But the stock apears to be less risky and, when comparing its historical volatility, Compass Minerals International is 1.02 times less risky than Skeena Resources. The stock trades about -0.1 of its potential returns per unit of risk. The Skeena Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  954.00  in Skeena Resources on January 8, 2025 and sell it today you would lose (39.00) from holding Skeena Resources or give up 4.09% of portfolio value over 90 days.

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

Compass Minerals International  vs.  Skeena Resources

Compass Minerals Int

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compass Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Skeena Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skeena Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Skeena Resources is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Compass Minerals and Skeena Resources

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

The idea behind Compass Minerals International and Skeena Resources 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.