Correlation Between TechPrecision Common and CompoSecure

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

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

Diversification Opportunities for TechPrecision Common and CompoSecure

0.65

Correlation Coefficient

TechPrecision Common  CompoSecure

Poor diversification

The 3 months correlation between TechPrecision and CompoSecure is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TechPrecision Common and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and TechPrecision Common 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 TechPrecision Common 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 TechPrecision Common i.e., TechPrecision Common and CompoSecure go up and down completely randomly.

Pair Corralation between TechPrecision Common and CompoSecure

Given the investment horizon of 90 days TechPrecision Common is expected to generate 2.73 times more return on investment than CompoSecure. However, TechPrecision Common is 2.73 times more volatile than CompoSecure. It trades about 0.19 of its potential returns per unit of risk. CompoSecure is currently generating about 0.27 per unit of risk. If you would invest  246.00  in TechPrecision Common on April 26, 2025 and sell it today you would earn a total of  159.00  from holding TechPrecision Common or generate 64.63% return on investment over 90 days.

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

TechPrecision Common  vs.  CompoSecure

TechPrecision Common

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TechPrecision Common are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, TechPrecision Common unveiled solid returns over the last few months and may actually be approaching a breakup point.

CompoSecure

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 21 (%) 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 TechPrecision Common and CompoSecure

The main advantage of trading using opposite TechPrecision Common and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechPrecision Common 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 TechPrecision Common 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.