Correlation Between CompoSecure and Meiwu Technology

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

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

Diversification Opportunities for CompoSecure and Meiwu Technology

-0.2

Correlation Coefficient

CompoSecure  Meiwu Technology

Good diversification

The 3 months correlation between CompoSecure and Meiwu is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of CompoSecure i.e., CompoSecure and Meiwu Technology go up and down completely randomly.

Pair Corralation between CompoSecure and Meiwu Technology

Assuming the 90 days horizon CompoSecure is expected to generate 0.92 times more return on investment than Meiwu Technology. However, CompoSecure is 1.08 times less risky than Meiwu Technology. It trades about 0.2 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.0 per unit of risk. If you would invest  450.00  in CompoSecure on May 10, 2025 and sell it today you would earn a total of  199.00  from holding CompoSecure or generate 44.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CompoSecure  vs.  Meiwu Technology Co

CompoSecure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 15 (%) 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.

Meiwu Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Meiwu Technology is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CompoSecure and Meiwu Technology

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

The idea behind CompoSecure and Meiwu Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.