Correlation Between Liquidmetal Technologies and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Liquidmetal Technologies 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 Liquidmetal Technologies and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liquidmetal Technologies and CompoSecure, you can compare the effects of market volatilities on Liquidmetal Technologies 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 Liquidmetal Technologies with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liquidmetal Technologies and CompoSecure.
Diversification Opportunities for Liquidmetal Technologies and CompoSecure
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liquidmetal and CompoSecure is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Liquidmetal Technologies and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Liquidmetal Technologies 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 Liquidmetal Technologies 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 Liquidmetal Technologies i.e., Liquidmetal Technologies and CompoSecure go up and down completely randomly.
Pair Corralation between Liquidmetal Technologies and CompoSecure
Given the investment horizon of 90 days Liquidmetal Technologies is expected to generate 38.8 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Liquidmetal Technologies is 13.63 times less risky than CompoSecure. It trades about 0.03 of its potential returns per unit of risk. CompoSecure is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 65.00 in CompoSecure on August 28, 2024 and sell it today you would earn a total of 420.00 from holding CompoSecure or generate 646.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.37% |
| Values | Daily Returns |
Liquidmetal Technologies vs. CompoSecure
Performance |
| Timeline |
| Liquidmetal Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CompoSecure |
Liquidmetal Technologies and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liquidmetal Technologies and CompoSecure
The main advantage of trading using opposite Liquidmetal Technologies and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liquidmetal Technologies 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.| Liquidmetal Technologies vs. Insteel Industries | Liquidmetal Technologies vs. Carpenter Technology | Liquidmetal Technologies vs. Haynes International | Liquidmetal Technologies vs. Mueller Industries |
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.
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