Correlation Between CompoSecure and Haynes International
Can any of the company-specific risk be diversified away by investing in both CompoSecure and Haynes International 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 CompoSecure and Haynes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompoSecure and Haynes International, you can compare the effects of market volatilities on CompoSecure and Haynes International 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 CompoSecure with a short position of Haynes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompoSecure and Haynes International.
Diversification Opportunities for CompoSecure and Haynes International
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompoSecure and Haynes is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Haynes International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haynes International and CompoSecure 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 CompoSecure are associated (or correlated) with Haynes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haynes International has no effect on the direction of CompoSecure i.e., CompoSecure and Haynes International go up and down completely randomly.
Pair Corralation between CompoSecure and Haynes International
Given the investment horizon of 90 days CompoSecure is expected to generate 13.76 times more return on investment than Haynes International. However, CompoSecure is 13.76 times more volatile than Haynes International. It trades about 0.04 of its potential returns per unit of risk. Haynes International is currently generating about 0.26 per unit of risk. If you would invest 1,527 in CompoSecure on August 24, 2024 and sell it today you would earn a total of 25.00 from holding CompoSecure or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompoSecure vs. Haynes International
Performance |
| Timeline |
| CompoSecure |
| Haynes International |
CompoSecure and Haynes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompoSecure and Haynes International
The main advantage of trading using opposite CompoSecure and Haynes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompoSecure position performs unexpectedly, Haynes International 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 Haynes International will offset losses from the drop in Haynes International's long position.| CompoSecure vs. Northwest Pipe | CompoSecure vs. Insteel Industries | CompoSecure vs. Carpenter Technology | CompoSecure vs. ESAB Corp |
| Haynes International vs. Insteel Industries | Haynes International vs. Mayville Engineering Co | Haynes International vs. Gulf Island Fabrication | Haynes International vs. ESAB Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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