Correlation Between Gulf Island and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Gulf Island 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 Gulf Island and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Island Fabrication and CompoSecure, you can compare the effects of market volatilities on Gulf Island 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 Gulf Island with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and CompoSecure.
Diversification Opportunities for Gulf Island and CompoSecure
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gulf and CompoSecure is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Gulf Island 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 Gulf Island Fabrication 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 Gulf Island i.e., Gulf Island and CompoSecure go up and down completely randomly.
Pair Corralation between Gulf Island and CompoSecure
Given the investment horizon of 90 days Gulf Island is expected to generate 20.03 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Gulf Island Fabrication is 3.78 times less risky than CompoSecure. It trades about 0.06 of its potential returns per unit of risk. CompoSecure is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,415 in CompoSecure on June 4, 2025 and sell it today you would earn a total of 497.00 from holding CompoSecure or generate 35.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Island Fabrication vs. CompoSecure
Performance |
| Timeline |
| Gulf Island Fabrication |
| CompoSecure |
Gulf Island and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Island and CompoSecure
The main advantage of trading using opposite Gulf Island and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Island 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.| Gulf Island vs. Northwest Pipe | Gulf Island vs. ESAB Corp | Gulf Island vs. Insteel Industries | Gulf Island vs. CompoSecure |
| CompoSecure vs. ESAB Corp | CompoSecure vs. Northwest Pipe | CompoSecure vs. Gulf Island Fabrication | CompoSecure vs. Carpenter Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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