Correlation Between Ryerson Holding and CompoSecure

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ryerson Holding 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 Ryerson Holding and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ryerson Holding Corp and CompoSecure, you can compare the effects of market volatilities on Ryerson Holding 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 Ryerson Holding with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryerson Holding and CompoSecure.

Diversification Opportunities for Ryerson Holding and CompoSecure

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ryerson and CompoSecure is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ryerson Holding Corp and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Ryerson Holding 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 Ryerson Holding Corp 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 Ryerson Holding i.e., Ryerson Holding and CompoSecure go up and down completely randomly.

Pair Corralation between Ryerson Holding and CompoSecure

Considering the 90-day investment horizon Ryerson Holding is expected to generate 2.58 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Ryerson Holding Corp is 2.01 times less risky than CompoSecure. It trades about 0.18 of its potential returns per unit of risk. CompoSecure is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  239.00  in CompoSecure on September 5, 2024 and sell it today you would earn a total of  270.00  from holding CompoSecure or generate 112.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ryerson Holding Corp  vs.  CompoSecure

 Performance 
       Timeline  
Ryerson Holding Corp 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ryerson Holding Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Ryerson Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.
CompoSecure 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, CompoSecure showed solid returns over the last few months and may actually be approaching a breakup point.

Ryerson Holding and CompoSecure Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ryerson Holding and CompoSecure

The main advantage of trading using opposite Ryerson Holding and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryerson Holding 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.
The idea behind Ryerson Holding Corp and CompoSecure 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes