Correlation Between CompX International and NET Power
Can any of the company-specific risk be diversified away by investing in both CompX International and NET Power 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 NET Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompX International and NET Power, you can compare the effects of market volatilities on CompX International and NET Power 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 NET Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and NET Power.
Diversification Opportunities for CompX International and NET Power
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompX and NET is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and NET Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NET Power 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 NET Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NET Power has no effect on the direction of CompX International i.e., CompX International and NET Power go up and down completely randomly.
Pair Corralation between CompX International and NET Power
Considering the 90-day investment horizon CompX International is expected to generate 0.72 times more return on investment than NET Power. However, CompX International is 1.39 times less risky than NET Power. It trades about 0.03 of its potential returns per unit of risk. NET Power is currently generating about -0.01 per unit of risk. If you would invest 1,894 in CompX International on October 9, 2025 and sell it today you would earn a total of 366.00 from holding CompX International or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompX International vs. NET Power
Performance |
| Timeline |
| CompX International |
| NET Power |
CompX International and NET Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompX International and NET Power
The main advantage of trading using opposite CompX International and NET Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International position performs unexpectedly, NET Power 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 NET Power will offset losses from the drop in NET Power's long position.| CompX International vs. NL Industries | CompX International vs. Mistras Group | CompX International vs. Radiant Logistics | CompX International vs. Mayville Engineering Co |
| NET Power vs. Park Ohio Holdings | NET Power vs. CEA Industries | NET Power vs. Omega Flex | NET Power vs. Costamare Bulkers Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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