Correlation Between CompoSecure and Equitech International

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

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

Diversification Opportunities for CompoSecure and Equitech International

0.0

Correlation Coefficient

CompoSecure  Equitech International

Pay attention - limited upside

The 3 months correlation between CompoSecure and Equitech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Equitech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitech International 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 Equitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitech International has no effect on the direction of CompoSecure i.e., CompoSecure and Equitech International go up and down completely randomly.

Pair Corralation between CompoSecure and Equitech International

If you would invest  406.00  in CompoSecure on May 6, 2025 and sell it today you would earn a total of  195.00  from holding CompoSecure or generate 48.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

CompoSecure  vs.  Equitech International

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.

Equitech International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equitech International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Equitech International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CompoSecure and Equitech International

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

The idea behind CompoSecure and Equitech International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.