Correlation Between CompoSecure and Aecon

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

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

Diversification Opportunities for CompoSecure and Aecon

0.77

Correlation Coefficient

CompoSecure  Aecon

Poor diversification

The 3 months correlation between CompoSecure and Aecon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and CompoSecure 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 CompoSecure are associated (or correlated) with Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of CompoSecure i.e., CompoSecure and Aecon go up and down completely randomly.

Pair Corralation between CompoSecure and Aecon

Given the investment horizon of 90 days CompoSecure is expected to generate 1.38 times more return on investment than Aecon. However, CompoSecure is 1.38 times more volatile than Aecon Group. It trades about 0.22 of its potential returns per unit of risk. Aecon Group is currently generating about 0.11 per unit of risk. If you would invest  1,125  in CompoSecure on May 3, 2025 and sell it today you would earn a total of  296.00  from holding CompoSecure or generate 26.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

CompoSecure  vs.  Aecon Group

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.

Aecon Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aecon Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aecon may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with CompoSecure and Aecon

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

The idea behind CompoSecure and Aecon Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..