Correlation Between CompoSecure and Toro

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

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

Diversification Opportunities for CompoSecure and Toro

0.41

Correlation Coefficient

CompoSecure  Toro

Very weak diversification

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

Pair Corralation between CompoSecure and Toro

Assuming the 90 days horizon CompoSecure is expected to generate 1.74 times more return on investment than Toro. However, CompoSecure is 1.74 times more volatile than Toro Co. It trades about 0.26 of its potential returns per unit of risk. Toro Co is currently generating about 0.09 per unit of risk. If you would invest  398.00  in CompoSecure on April 29, 2025 and sell it today you would earn a total of  252.00  from holding CompoSecure or generate 63.32% return on investment over 90 days.

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

CompoSecure  vs.  Toro Co

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.

Toro

Risk-Adjusted Performance

OK

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

Pair Trading with CompoSecure and Toro

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

The idea behind CompoSecure and Toro Co 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.