Correlation Between Cipher Pharmaceuticals and CompoSecure

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

By analyzing existing cross correlation between Cipher Pharmaceuticals and CompoSecure, you can compare the effects of market volatilities on Cipher Pharmaceuticals and CompoSecure 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 Cipher Pharmaceuticals with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipher Pharmaceuticals and CompoSecure.

Diversification Opportunities for Cipher Pharmaceuticals and CompoSecure

0.0

Correlation Coefficient

Cipher Pharmaceuticals  CompoSecure

Pay attention - limited upside

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

Pair Corralation between Cipher Pharmaceuticals and CompoSecure

If you would invest  1,099  in CompoSecure on April 30, 2025 and sell it today you would earn a total of  330.00  from holding CompoSecure or generate 30.03% return on investment over 90 days.

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

Cipher Pharmaceuticals  vs.  CompoSecure

Cipher Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cipher Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cipher Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CompoSecure displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cipher Pharmaceuticals and CompoSecure

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

The idea behind Cipher Pharmaceuticals and CompoSecure 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.