Correlation Between Hawaiian Electric and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric 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 Hawaiian Electric and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and CompoSecure, you can compare the effects of market volatilities on Hawaiian Electric 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 Hawaiian Electric with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and CompoSecure.
Diversification Opportunities for Hawaiian Electric and CompoSecure
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hawaiian and CompoSecure is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Hawaiian Electric 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 Hawaiian Electric Industries 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 Hawaiian Electric i.e., Hawaiian Electric and CompoSecure go up and down completely randomly.
Pair Corralation between Hawaiian Electric and CompoSecure
Allowing for the 90-day total investment horizon Hawaiian Electric is expected to generate 5.3 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Hawaiian Electric Industries is 3.72 times less risky than CompoSecure. It trades about 0.14 of its potential returns per unit of risk. CompoSecure is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 586.00 in CompoSecure on May 29, 2025 and sell it today you would earn a total of 602.00 from holding CompoSecure or generate 102.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. CompoSecure
Performance |
| Timeline |
| Hawaiian Electric |
| CompoSecure |
Hawaiian Electric and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and CompoSecure
The main advantage of trading using opposite Hawaiian Electric and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric 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.| Hawaiian Electric vs. CMS Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. IDACORP | Hawaiian Electric vs. Pinnacle West Capital |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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