Correlation Between Compass Diversified and Evercore Partners

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

Diversification Opportunities for Compass Diversified and Evercore Partners

-0.68

Correlation Coefficient

Compass Diversified  Evercore Partners

Excellent diversification

The 3 months correlation between Compass and Evercore is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and Evercore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evercore Partners 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 Evercore Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evercore Partners has no effect on the direction of Compass Diversified i.e., Compass Diversified and Evercore Partners go up and down completely randomly.

Pair Corralation between Compass Diversified and Evercore Partners

Given the investment horizon of 90 days Compass Diversified Holdings is expected to under-perform the Evercore Partners. In addition to that, Compass Diversified is 4.2 times more volatile than Evercore Partners. It trades about -0.11 of its total potential returns per unit of risk. Evercore Partners is currently generating about 0.32 per unit of volatility. If you would invest  20,539  in Evercore Partners on May 1, 2025 and sell it today you would earn a total of  9,716  from holding Evercore Partners or generate 47.31% return on investment over 90 days.

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

Compass Diversified Holdings  vs.  Evercore Partners

Compass Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compass Diversified Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Evercore Partners

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Evercore Partners reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compass Diversified and Evercore Partners

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

The idea behind Compass Diversified Holdings and Evercore Partners 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.