Correlation Between Rivernorth Opportunities and CompoSecure

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

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

Diversification Opportunities for Rivernorth Opportunities and CompoSecure

0.9

Correlation Coefficient

Rivernorth Opportunities  CompoSecure

Almost no diversification

The 3 months correlation between Rivernorth and CompoSecure is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Rivernorth Opportunities and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Rivernorth Opportunities 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 Rivernorth Opportunities 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 Rivernorth Opportunities i.e., Rivernorth Opportunities and CompoSecure go up and down completely randomly.

Pair Corralation between Rivernorth Opportunities and CompoSecure

Considering the 90-day investment horizon Rivernorth Opportunities is expected to generate 2.72 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Rivernorth Opportunities is 2.71 times less risky than CompoSecure. It trades about 0.19 of its potential returns per unit of risk. CompoSecure is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,125  in CompoSecure on May 5, 2025 and sell it today you would earn a total of  262.00  from holding CompoSecure or generate 23.29% return on investment over 90 days.

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

Rivernorth Opportunities  vs.  CompoSecure

Rivernorth Opportunities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Rivernorth Opportunities may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CompoSecure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 14 (%) 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 Rivernorth Opportunities and CompoSecure

The main advantage of trading using opposite Rivernorth Opportunities and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rivernorth Opportunities 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 Rivernorth Opportunities 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.