Correlation Between CompX International and Mace Security
Can any of the company-specific risk be diversified away by investing in both CompX International and Mace Security 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 CompX International and Mace Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompX International and Mace Security Intl, you can compare the effects of market volatilities on CompX International and Mace Security 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 CompX International with a short position of Mace Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and Mace Security.
Diversification Opportunities for CompX International and Mace Security
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompX and Mace is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and Mace Security Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mace Security Intl and CompX International 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 CompX International are associated (or correlated) with Mace Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mace Security Intl has no effect on the direction of CompX International i.e., CompX International and Mace Security go up and down completely randomly.
Pair Corralation between CompX International and Mace Security
Considering the 90-day investment horizon CompX International is expected to generate 0.48 times more return on investment than Mace Security. However, CompX International is 2.09 times less risky than Mace Security. It trades about 0.05 of its potential returns per unit of risk. Mace Security Intl is currently generating about -0.04 per unit of risk. If you would invest 1,651 in CompX International on August 31, 2024 and sell it today you would earn a total of 1,126 from holding CompX International or generate 68.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
CompX International vs. Mace Security Intl
Performance |
| Timeline |
| CompX International |
| Mace Security Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CompX International and Mace Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompX International and Mace Security
The main advantage of trading using opposite CompX International and Mace Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International position performs unexpectedly, Mace Security 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 Mace Security will offset losses from the drop in Mace Security's long position.| CompX International vs. NL Industries | CompX International vs. Eastern Co | CompX International vs. CF Financial | CompX International vs. Bar Harbor Bankshares |
| Mace Security vs. CompX International | Mace Security vs. Mistras Group | Mace Security vs. MSA Safety | Mace Security vs. Brinks Company |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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