Correlation Between Kingsoft Cloud and CompoSecure

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

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

Diversification Opportunities for Kingsoft Cloud and CompoSecure

-0.29

Correlation Coefficient

Kingsoft Cloud  CompoSecure

Very good diversification

The 3 months correlation between Kingsoft and CompoSecure is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kingsoft Cloud Holdings and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Kingsoft Cloud 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 Kingsoft Cloud Holdings 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 Kingsoft Cloud i.e., Kingsoft Cloud and CompoSecure go up and down completely randomly.

Pair Corralation between Kingsoft Cloud and CompoSecure

Allowing for the 90-day total investment horizon Kingsoft Cloud Holdings is expected to under-perform the CompoSecure. In addition to that, Kingsoft Cloud is 1.06 times more volatile than CompoSecure. It trades about -0.06 of its total potential returns per unit of risk. CompoSecure is currently generating about 0.14 per unit of volatility. If you would invest  420.00  in CompoSecure on March 22, 2025 and sell it today you would earn a total of  202.00  from holding CompoSecure or generate 48.1% return on investment over 90 days.

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

Kingsoft Cloud Holdings  vs.  CompoSecure

Kingsoft Cloud Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kingsoft Cloud Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CompoSecure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 11 (%) 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.

Pair Trading with Kingsoft Cloud and CompoSecure

The main advantage of trading using opposite Kingsoft Cloud and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsoft Cloud 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 Kingsoft Cloud Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.