Correlation Between CompoSecure and Barings BDC

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

By analyzing existing cross correlation between CompoSecure and Barings BDC, you can compare the effects of market volatilities on CompoSecure and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompoSecure and Barings BDC.

Diversification Opportunities for CompoSecure and Barings BDC

0.78

Correlation Coefficient

CompoSecure  Barings BDC

Poor diversification

The 3 months correlation between CompoSecure and Barings is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of CompoSecure i.e., CompoSecure and Barings BDC go up and down completely randomly.

Pair Corralation between CompoSecure and Barings BDC

Assuming the 90 days horizon CompoSecure is expected to generate 6.93 times more return on investment than Barings BDC. However, CompoSecure is 6.93 times more volatile than Barings BDC. It trades about 0.2 of its potential returns per unit of risk. Barings BDC is currently generating about 0.17 per unit of risk. If you would invest  585.00  in CompoSecure on June 1, 2025 and sell it today you would earn a total of  621.00  from holding CompoSecure or generate 106.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

CompoSecure  vs.  Barings BDC

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 abnormal basic indicators, CompoSecure showed solid returns over the last few months and may actually be approaching a breakup point.

Barings BDC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Barings BDC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Barings BDC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with CompoSecure and Barings BDC

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

The idea behind CompoSecure and Barings BDC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.