Correlation Between Carpenter Technology and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology 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 Carpenter Technology and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and CompoSecure, you can compare the effects of market volatilities on Carpenter Technology 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 Carpenter Technology with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and CompoSecure.
Diversification Opportunities for Carpenter Technology and CompoSecure
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carpenter and CompoSecure is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Carpenter Technology 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 Carpenter Technology 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 Carpenter Technology i.e., Carpenter Technology and CompoSecure go up and down completely randomly.
Pair Corralation between Carpenter Technology and CompoSecure
Considering the 90-day investment horizon Carpenter Technology is expected to generate 400.89 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Carpenter Technology is 3.13 times less risky than CompoSecure. It trades about 0.0 of its potential returns per unit of risk. CompoSecure is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 626.00 in CompoSecure on June 12, 2025 and sell it today you would earn a total of 467.00 from holding CompoSecure or generate 74.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Carpenter Technology vs. CompoSecure
Performance |
| Timeline |
| Carpenter Technology |
| CompoSecure |
Carpenter Technology and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and CompoSecure
The main advantage of trading using opposite Carpenter Technology and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology 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.| Carpenter Technology vs. Allegheny Technologies Incorporated | Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. ESAB Corp | Carpenter Technology vs. Insteel Industries |
| CompoSecure vs. CompoSecure | CompoSecure vs. Dave Warrants | CompoSecure vs. Evolv Technologies Holdings | CompoSecure vs. Ampco Pittsburgh |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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