Correlation Between Cartesian Growth and CompoSecure

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

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

Diversification Opportunities for Cartesian Growth and CompoSecure

0.63

Correlation Coefficient

Cartesian Growth  CompoSecure

Poor diversification

The 3 months correlation between Cartesian and CompoSecure is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Cartesian Growth 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 Cartesian Growth 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 Cartesian Growth i.e., Cartesian Growth and CompoSecure go up and down completely randomly.

Pair Corralation between Cartesian Growth and CompoSecure

Assuming the 90 days horizon Cartesian Growth is expected to generate 28.22 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Cartesian Growth is 6.69 times less risky than CompoSecure. It trades about 0.05 of its potential returns per unit of risk. CompoSecure is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  450.00  in CompoSecure on May 10, 2025 and sell it today you would earn a total of  199.00  from holding CompoSecure or generate 44.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Cartesian Growth  vs.  CompoSecure

Cartesian Growth

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cartesian Growth are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cartesian Growth is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CompoSecure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 15 (%) 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 Cartesian Growth and CompoSecure

The main advantage of trading using opposite Cartesian Growth and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartesian Growth 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 Cartesian Growth 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.