Correlation Between CompoSecure and PHLX Oil

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

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

Diversification Opportunities for CompoSecure and PHLX Oil

0.0

Correlation Coefficient

CompoSecure  PHLX Oil

Pay attention - limited upside

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

Pair Corralation between CompoSecure and PHLX Oil

If you would invest  415.00  in CompoSecure on May 7, 2025 and sell it today you would earn a total of  210.00  from holding CompoSecure or generate 50.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CompoSecure  vs.  PHLX Oil Service

Pair Trading with CompoSecure and PHLX Oil

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

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