Correlation Between Bayer AG and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Bayer AG 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 Bayer AG and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG PK and CompoSecure, you can compare the effects of market volatilities on Bayer AG 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 Bayer AG with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and CompoSecure.
Diversification Opportunities for Bayer AG and CompoSecure
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayer and CompoSecure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG PK and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Bayer AG 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 Bayer AG PK 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 Bayer AG i.e., Bayer AG and CompoSecure go up and down completely randomly.
Pair Corralation between Bayer AG and CompoSecure
If you would invest 605.00 in CompoSecure on June 3, 2025 and sell it today you would earn a total of 501.00 from holding CompoSecure or generate 82.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bayer AG PK vs. CompoSecure
Performance |
| Timeline |
| Bayer AG PK |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| CompoSecure |
Bayer AG and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and CompoSecure
The main advantage of trading using opposite Bayer AG and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG 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.| Bayer AG vs. Novartis AG ADR | Bayer AG vs. Sanofi ADR | Bayer AG vs. AstraZeneca PLC ADR | Bayer AG vs. GlaxoSmithKline PLC ADR |
| CompoSecure vs. Arts Way Manufacturing Co | CompoSecure vs. China Natural Resources | CompoSecure vs. Euro Tech Holdings | CompoSecure vs. Deswell 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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