Correlation Between Offerpad Solutions and Compass Minerals

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

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

Diversification Opportunities for Offerpad Solutions and Compass Minerals

0.46

Correlation Coefficient

Offerpad Solutions  Compass Minerals

Very weak diversification

The 3 months correlation between Offerpad and Compass is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Offerpad Solutions 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 Offerpad Solutions 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 Offerpad Solutions 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 Offerpad Solutions i.e., Offerpad Solutions and Compass Minerals go up and down completely randomly.

Pair Corralation between Offerpad Solutions and Compass Minerals

Given the investment horizon of 90 days Offerpad Solutions is expected to generate 4.07 times more return on investment than Compass Minerals. However, Offerpad Solutions is 4.07 times more volatile than Compass Minerals International. It trades about 0.09 of its potential returns per unit of risk. Compass Minerals International is currently generating about 0.01 per unit of risk. If you would invest  108.00  in Offerpad Solutions on May 18, 2025 and sell it today you would earn a total of  35.00  from holding Offerpad Solutions or generate 32.41% return on investment over 90 days.

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

Offerpad Solutions  vs.  Compass Minerals International

Offerpad Solutions

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Offerpad Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Offerpad Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Compass Minerals Int

Risk-Adjusted Performance

Weakest

Over the last 90 days Compass Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Compass Minerals is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Offerpad Solutions and Compass Minerals

The main advantage of trading using opposite Offerpad Solutions and Compass Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offerpad Solutions 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 Offerpad Solutions 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.