Correlation Between Liquidmetal Technologies and CompoSecure

Can any of the company-specific risk be diversified away by investing in both Liquidmetal Technologies 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 Liquidmetal Technologies and CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liquidmetal Technologies and CompoSecure, you can compare the effects of market volatilities on Liquidmetal Technologies 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 Liquidmetal Technologies with a short position of CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liquidmetal Technologies and CompoSecure.

Diversification Opportunities for Liquidmetal Technologies and CompoSecure

0.0

Correlation Coefficient

Liquidmetal Technologies  CompoSecure

Pay attention - limited upside

The 3 months correlation between Liquidmetal and CompoSecure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liquidmetal Technologies and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure and Liquidmetal Technologies 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 Liquidmetal Technologies 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 Liquidmetal Technologies i.e., Liquidmetal Technologies and CompoSecure go up and down completely randomly.

Pair Corralation between Liquidmetal Technologies and CompoSecure

If you would invest  1,152  in CompoSecure on September 3, 2024 and sell it today you would earn a total of  443.00  from holding CompoSecure or generate 38.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Liquidmetal Technologies  vs.  CompoSecure

Liquidmetal Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liquidmetal Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Liquidmetal Technologies is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CompoSecure

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CompoSecure are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CompoSecure displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liquidmetal Technologies and CompoSecure

The main advantage of trading using opposite Liquidmetal Technologies and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liquidmetal Technologies 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.

The idea behind Liquidmetal Technologies and CompoSecure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.