Correlation Between Compass Diversified and Arrayit

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

Diversification Opportunities for Compass Diversified and Arrayit

0.0

Correlation Coefficient

Compass Diversified  Arrayit

Pay attention - limited upside

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

Pair Corralation between Compass Diversified and Arrayit

If you would invest  1,349  in Compass Diversified Holdings on May 26, 2025 and sell it today you would earn a total of  416.00  from holding Compass Diversified Holdings or generate 30.84% return on investment over 90 days.

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

Compass Diversified Holdings  vs.  Arrayit

Compass Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Diversified Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compass Diversified sustained solid returns over the last few months and may actually be approaching a breakup point.

Arrayit

Risk-Adjusted Performance

Weakest

Over the last 90 days Arrayit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Arrayit 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 Diversified and Arrayit

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

The idea behind Compass Diversified Holdings and Arrayit 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.