Correlation Between CompoSecure and WAVS Old

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

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

Diversification Opportunities for CompoSecure and WAVS Old

0.0

Correlation Coefficient

CompoSecure  WAVS Old

Pay attention - limited upside

The 3 months correlation between CompoSecure and WAVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and WAVS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAVS Old 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 WAVS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAVS Old has no effect on the direction of CompoSecure i.e., CompoSecure and WAVS Old go up and down completely randomly.

Pair Corralation between CompoSecure and WAVS Old

If you would invest (100.00) in WAVS Old on December 23, 2024 and sell it today you would earn a total of  100.00  from holding WAVS Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CompoSecure  vs.  WAVS Old

CompoSecure

Risk-Adjusted Performance

Very Weak

Over the last 90 days CompoSecure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CompoSecure is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

WAVS Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days WAVS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WAVS Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CompoSecure and WAVS Old

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

The idea behind CompoSecure and WAVS Old 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.