Correlation Between Ioneer and Compass Minerals

Can any of the company-specific risk be diversified away by investing in both Ioneer and Compass Minerals 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 Ioneer and Compass Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ioneer and Compass Minerals International, you can compare the effects of market volatilities on Ioneer and Compass Minerals 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 Ioneer with a short position of Compass Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ioneer and Compass Minerals.

Diversification Opportunities for Ioneer and Compass Minerals

-0.57

Correlation Coefficient

Ioneer  Compass Minerals

Excellent diversification

The 3 months correlation between Ioneer and Compass is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ioneer and Compass Minerals International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Minerals Int and Ioneer 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 ioneer are associated (or correlated) with Compass Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Minerals Int has no effect on the direction of Ioneer i.e., Ioneer and Compass Minerals go up and down completely randomly.

Pair Corralation between Ioneer and Compass Minerals

Assuming the 90 days horizon ioneer is expected to under-perform the Compass Minerals. In addition to that, Ioneer is 3.45 times more volatile than Compass Minerals International. It trades about -0.01 of its total potential returns per unit of risk. Compass Minerals International is currently generating about 0.06 per unit of volatility. If you would invest  1,946  in Compass Minerals International on May 10, 2025 and sell it today you would earn a total of  124.00  from holding Compass Minerals International or generate 6.37% return on investment over 90 days.

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

ioneer  vs.  Compass Minerals International

ioneer

Risk-Adjusted Performance

Weakest

Over the last 90 days ioneer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ioneer is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Compass Minerals Int

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Minerals International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Compass Minerals may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ioneer and Compass Minerals

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

The idea behind ioneer and Compass Minerals International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.