Correlation Between BrightView Holdings and CompoSecure

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

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

Diversification Opportunities for BrightView Holdings and CompoSecure

-0.09

Correlation Coefficient

BrightView Holdings  CompoSecure

Good diversification

The 3 months correlation between BrightView and CompoSecure is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and BrightView Holdings 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 BrightView Holdings 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 BrightView Holdings i.e., BrightView Holdings and CompoSecure go up and down completely randomly.

Pair Corralation between BrightView Holdings and CompoSecure

Allowing for the 90-day total investment horizon BrightView Holdings is expected to under-perform the CompoSecure. But the stock apears to be less risky and, when comparing its historical volatility, BrightView Holdings is 1.52 times less risky than CompoSecure. The stock trades about -0.05 of its potential returns per unit of risk. The CompoSecure is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,233  in CompoSecure on May 14, 2025 and sell it today you would earn a total of  649.00  from holding CompoSecure or generate 52.64% return on investment over 90 days.

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

BrightView Holdings  vs.  CompoSecure

BrightView Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days BrightView Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CompoSecure displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BrightView Holdings and CompoSecure

The main advantage of trading using opposite BrightView Holdings and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrightView Holdings 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 BrightView Holdings 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.