Correlation Between BranchOut Food and CompoSecure

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

By analyzing existing cross correlation between BranchOut Food Common and CompoSecure, you can compare the effects of market volatilities on BranchOut Food and CompoSecure 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 BranchOut Food with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of BranchOut Food and CompoSecure.

Diversification Opportunities for BranchOut Food and CompoSecure

0.65

Correlation Coefficient

BranchOut Food  CompoSecure

Poor diversification

The 3 months correlation between BranchOut and CompoSecure is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BranchOut Food Common and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and BranchOut Food 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 BranchOut Food Common are associated (or correlated) with CompoSecure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompoSecure has no effect on the direction of BranchOut Food i.e., BranchOut Food and CompoSecure go up and down completely randomly.

Pair Corralation between BranchOut Food and CompoSecure

Considering the 90-day investment horizon BranchOut Food is expected to generate 1.51 times less return on investment than CompoSecure. In addition to that, BranchOut Food is 1.59 times more volatile than CompoSecure. It trades about 0.11 of its total potential returns per unit of risk. CompoSecure is currently generating about 0.26 per unit of volatility. If you would invest  398.00  in CompoSecure on April 29, 2025 and sell it today you would earn a total of  252.00  from holding CompoSecure or generate 63.32% return on investment over 90 days.

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

BranchOut Food Common  vs.  CompoSecure

BranchOut Food Common

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BranchOut Food Common are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BranchOut Food reported solid returns over the last few months and may actually be approaching a breakup point.

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CompoSecure showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BranchOut Food and CompoSecure

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

The idea behind BranchOut Food Common and CompoSecure 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.