Correlation Between Willamette Valley and CompoSecure

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

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

Diversification Opportunities for Willamette Valley and CompoSecure

-0.48

Correlation Coefficient

Willamette Valley  CompoSecure

Very good diversification

The 3 months correlation between Willamette and CompoSecure is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Willamette Valley 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 Willamette Valley Vineyards 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 Willamette Valley i.e., Willamette Valley and CompoSecure go up and down completely randomly.

Pair Corralation between Willamette Valley and CompoSecure

Assuming the 90 days horizon Willamette Valley Vineyards is expected to under-perform the CompoSecure. But the preferred stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 2.65 times less risky than CompoSecure. The preferred stock trades about -0.01 of its potential returns per unit of risk. The CompoSecure is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  477.00  in CompoSecure on May 13, 2025 and sell it today you would earn a total of  471.00  from holding CompoSecure or generate 98.74% return on investment over 90 days.

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

Willamette Valley Vineyards  vs.  CompoSecure

Willamette Valley

Risk-Adjusted Performance

Weakest

Over the last 90 days Willamette Valley Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Willamette Valley is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Willamette Valley and CompoSecure

The main advantage of trading using opposite Willamette Valley and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley 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 Willamette Valley Vineyards 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.