Correlation Between Zedcor Energy and Compass Minerals

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

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

Diversification Opportunities for Zedcor Energy and Compass Minerals

-0.52

Correlation Coefficient

Zedcor Energy  Compass Minerals

Excellent diversification

The 3 months correlation between Zedcor and Compass is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zedcor Energy 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 Zedcor Energy 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 Zedcor Energy 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 Zedcor Energy i.e., Zedcor Energy and Compass Minerals go up and down completely randomly.

Pair Corralation between Zedcor Energy and Compass Minerals

Assuming the 90 days horizon Zedcor Energy is expected to generate 1.19 times more return on investment than Compass Minerals. However, Zedcor Energy is 1.19 times more volatile than Compass Minerals International. It trades about 0.19 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  428.00  in Zedcor Energy on August 29, 2025 and sell it today you would earn a total of  170.00  from holding Zedcor Energy or generate 39.72% return on investment over 90 days.

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

Zedcor Energy  vs.  Compass Minerals International

Zedcor Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zedcor Energy showed 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 current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Zedcor Energy and Compass Minerals

The main advantage of trading using opposite Zedcor Energy and Compass Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedcor Energy 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 Zedcor Energy 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.