Correlation Between Safe Bulkers and Compass Diversified

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

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

Diversification Opportunities for Safe Bulkers and Compass Diversified

-0.8

Correlation Coefficient

Safe Bulkers  Compass Diversified

Pay attention - limited upside

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

Pair Corralation between Safe Bulkers and Compass Diversified

Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 0.36 times more return on investment than Compass Diversified. However, Safe Bulkers is 2.77 times less risky than Compass Diversified. It trades about 0.09 of its potential returns per unit of risk. Compass Diversified Holdings is currently generating about -0.11 per unit of risk. If you would invest  433.00  in Safe Bulkers on August 23, 2025 and sell it today you would earn a total of  37.00  from holding Safe Bulkers or generate 8.55% return on investment over 90 days.

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

Safe Bulkers  vs.  Compass Diversified Holdings

Safe Bulkers

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Safe Bulkers may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Compass Diversified

Risk-Adjusted Performance

Weakest

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

Pair Trading with Safe Bulkers and Compass Diversified

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

The idea behind Safe Bulkers and Compass Diversified Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.