Correlation Between Compass Diversified and Perella Weinberg

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

Diversification Opportunities for Compass Diversified and Perella Weinberg

0.8

Correlation Coefficient

Compass Diversified  Perella Weinberg

Very poor diversification

The 3 months correlation between Compass and Perella is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified Holdings and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg 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 Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of Compass Diversified i.e., Compass Diversified and Perella Weinberg go up and down completely randomly.

Pair Corralation between Compass Diversified and Perella Weinberg

Given the investment horizon of 90 days Compass Diversified is expected to generate 1.5 times less return on investment than Perella Weinberg. In addition to that, Compass Diversified is 1.33 times more volatile than Perella Weinberg Partners. It trades about 0.01 of its total potential returns per unit of risk. Perella Weinberg Partners is currently generating about 0.03 per unit of volatility. If you would invest  2,058  in Perella Weinberg Partners on July 3, 2025 and sell it today you would earn a total of  47.00  from holding Perella Weinberg Partners or generate 2.28% return on investment over 90 days.

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

Compass Diversified Holdings  vs.  Perella Weinberg Partners

Compass Diversified

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Diversified Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Compass Diversified is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Perella Weinberg Partners

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perella Weinberg Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Perella Weinberg is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Compass Diversified and Perella Weinberg

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

The idea behind Compass Diversified Holdings and Perella Weinberg 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 Global Correlations module to find global opportunities by holding instruments from different markets.