Correlation Between CompoSecure and Bitcoin Depot

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

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

Diversification Opportunities for CompoSecure and Bitcoin Depot

0.93

Correlation Coefficient

CompoSecure  Bitcoin Depot

Almost no diversification

The 3 months correlation between CompoSecure and Bitcoin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of CompoSecure i.e., CompoSecure and Bitcoin Depot go up and down completely randomly.

Pair Corralation between CompoSecure and Bitcoin Depot

Assuming the 90 days horizon CompoSecure is expected to generate 3.37 times less return on investment than Bitcoin Depot. But when comparing it to its historical volatility, CompoSecure is 2.43 times less risky than Bitcoin Depot. It trades about 0.22 of its potential returns per unit of risk. Bitcoin Depot is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  137.00  in Bitcoin Depot on May 7, 2025 and sell it today you would earn a total of  363.00  from holding Bitcoin Depot or generate 264.96% return on investment over 90 days.

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

CompoSecure  vs.  Bitcoin Depot

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 16 (%) 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.

Bitcoin Depot

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CompoSecure and Bitcoin Depot

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

The idea behind CompoSecure and Bitcoin Depot 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.