Correlation Between CompoSecure and SmartStop Self

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

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

Diversification Opportunities for CompoSecure and SmartStop Self

0.74

Correlation Coefficient

CompoSecure  SmartStop Self

Poor diversification

The 3 months correlation between CompoSecure and SmartStop is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of CompoSecure i.e., CompoSecure and SmartStop Self go up and down completely randomly.

Pair Corralation between CompoSecure and SmartStop Self

Assuming the 90 days horizon CompoSecure is expected to generate 2.47 times more return on investment than SmartStop Self. However, CompoSecure is 2.47 times more volatile than SmartStop Self Storage. It trades about 0.26 of its potential returns per unit of risk. SmartStop Self Storage is currently generating about 0.1 per unit of risk. If you would invest  395.00  in CompoSecure on April 28, 2025 and sell it today you would earn a total of  255.00  from holding CompoSecure or generate 64.56% return on investment over 90 days.

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

CompoSecure  vs.  SmartStop Self Storage

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 20 (%) 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.

SmartStop Self Storage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SmartStop Self Storage are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, SmartStop Self may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CompoSecure and SmartStop Self

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

The idea behind CompoSecure and SmartStop Self Storage 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.