Correlation Between CompoSecure and Titan America

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

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

Diversification Opportunities for CompoSecure and Titan America

0.41

Correlation Coefficient

CompoSecure  Titan America

Very weak diversification

The 3 months correlation between CompoSecure and Titan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Titan America SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan America SA 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 Titan America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan America SA has no effect on the direction of CompoSecure i.e., CompoSecure and Titan America go up and down completely randomly.

Pair Corralation between CompoSecure and Titan America

Assuming the 90 days horizon CompoSecure is expected to generate 27.88 times more return on investment than Titan America. However, CompoSecure is 27.88 times more volatile than Titan America SA. It trades about 0.09 of its potential returns per unit of risk. Titan America SA is currently generating about -0.03 per unit of risk. If you would invest  105.00  in CompoSecure on April 11, 2025 and sell it today you would earn a total of  546.00  from holding CompoSecure or generate 520.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	23.6%
Values	Daily Returns

CompoSecure  vs.  Titan America SA

CompoSecure

Risk-Adjusted Performance

Solid

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

Titan America SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Titan America SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Titan America displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CompoSecure and Titan America

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

The idea behind CompoSecure and Titan America SA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.