Correlation Between CompoSecure and Contextlogic

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

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

Diversification Opportunities for CompoSecure and Contextlogic

0.11

Correlation Coefficient

CompoSecure  Contextlogic

Average diversification

The 3 months correlation between CompoSecure and Contextlogic is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of CompoSecure i.e., CompoSecure and Contextlogic go up and down completely randomly.

Pair Corralation between CompoSecure and Contextlogic

Assuming the 90 days horizon CompoSecure is expected to generate 0.78 times more return on investment than Contextlogic. However, CompoSecure is 1.28 times less risky than Contextlogic. It trades about 0.21 of its potential returns per unit of risk. Contextlogic is currently generating about 0.03 per unit of risk. If you would invest  429.00  in CompoSecure on May 9, 2025 and sell it today you would earn a total of  214.00  from holding CompoSecure or generate 49.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	49.18%
Values	Daily Returns

CompoSecure  vs.  Contextlogic

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.

Contextlogic

Risk-Adjusted Performance

Weak

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain technical and fundamental indicators, Contextlogic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with CompoSecure and Contextlogic

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

The idea behind CompoSecure and Contextlogic 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.