Correlation Between CompoSecure and Amer Sports,

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

By analyzing existing cross correlation between CompoSecure and Amer Sports,, you can compare the effects of market volatilities on CompoSecure and Amer Sports, 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 Amer Sports,. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompoSecure and Amer Sports,.

Diversification Opportunities for CompoSecure and Amer Sports,

0.8

Correlation Coefficient

CompoSecure  Amer Sports,

Very poor diversification

The 3 months correlation between CompoSecure and Amer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, 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 Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of CompoSecure i.e., CompoSecure and Amer Sports, go up and down completely randomly.

Pair Corralation between CompoSecure and Amer Sports,

Assuming the 90 days horizon CompoSecure is expected to generate 29.32 times more return on investment than Amer Sports,. However, CompoSecure is 29.32 times more volatile than Amer Sports,. It trades about 0.11 of its potential returns per unit of risk. Amer Sports, is currently generating about 0.26 per unit of risk. If you would invest  49.00  in CompoSecure on October 4, 2024 and sell it today you would earn a total of  424.00  from holding CompoSecure or generate 865.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.21%
Values	Daily Returns

CompoSecure  vs.  Amer Sports,

CompoSecure

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 7 (%) 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.

Amer Sports,

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CompoSecure and Amer Sports,

The main advantage of trading using opposite CompoSecure and Amer Sports, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompoSecure position performs unexpectedly, Amer Sports, 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 Amer Sports, will offset losses from the drop in Amer Sports,'s long position.

The idea behind CompoSecure and Amer Sports, 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.