Correlation Between CompoSecure and Arts Way
Can any of the company-specific risk be diversified away by investing in both CompoSecure and Arts Way 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 Arts Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompoSecure and Arts Way Manufacturing Co, you can compare the effects of market volatilities on CompoSecure and Arts Way 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 Arts Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompoSecure and Arts Way.
Diversification Opportunities for CompoSecure and Arts Way
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompoSecure and Arts is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CompoSecure and Arts Way Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arts Way Manufacturing 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 Arts Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arts Way Manufacturing has no effect on the direction of CompoSecure i.e., CompoSecure and Arts Way go up and down completely randomly.
Pair Corralation between CompoSecure and Arts Way
Assuming the 90 days horizon CompoSecure is expected to generate 0.61 times more return on investment than Arts Way. However, CompoSecure is 1.63 times less risky than Arts Way. It trades about 0.11 of its potential returns per unit of risk. Arts Way Manufacturing Co is currently generating about -0.14 per unit of risk. If you would invest 995.00 in CompoSecure on June 12, 2025 and sell it today you would earn a total of 98.00 from holding CompoSecure or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompoSecure vs. Arts Way Manufacturing Co
Performance |
| Timeline |
| CompoSecure |
| Arts Way Manufacturing |
CompoSecure and Arts Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompoSecure and Arts Way
The main advantage of trading using opposite CompoSecure and Arts Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompoSecure position performs unexpectedly, Arts Way 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 Arts Way will offset losses from the drop in Arts Way's long position.| CompoSecure vs. CompoSecure | CompoSecure vs. Dave Warrants | CompoSecure vs. Evolv Technologies Holdings | CompoSecure vs. Ampco Pittsburgh |
| Arts Way vs. Ag Growth International | Arts Way vs. AmeraMex International | Arts Way vs. Alamo Group | Arts Way vs. Lindsay |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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