Correlation Between Compass Minerals and Sigma Lithium

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

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

Diversification Opportunities for Compass Minerals and Sigma Lithium

0.0

Correlation Coefficient

Compass Minerals  Sigma Lithium

Pay attention - limited upside

The 3 months correlation between Compass and Sigma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compass Minerals International and Sigma Lithium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigma Lithium Resources and Compass Minerals 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 Minerals International are associated (or correlated) with Sigma Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigma Lithium Resources has no effect on the direction of Compass Minerals i.e., Compass Minerals and Sigma Lithium go up and down completely randomly.

Pair Corralation between Compass Minerals and Sigma Lithium

If you would invest  602.00  in Sigma Lithium Resources on August 26, 2025 and sell it today you would earn a total of  383.00  from holding Sigma Lithium Resources or generate 63.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Compass Minerals International  vs.  Sigma Lithium Resources

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Sigma Lithium Resources

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Sigma Lithium Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak primary indicators, Sigma Lithium disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compass Minerals and Sigma Lithium

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

The idea behind Compass Minerals International and Sigma Lithium Resources 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.