Correlation Between Compucom Software and Bosch

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

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

Diversification Opportunities for Compucom Software and Bosch

-0.45

Correlation Coefficient

Compucom Software  Bosch

Very good diversification

The 3 months correlation between Compucom and Bosch is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Bosch Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Limited and Compucom Software 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 Compucom Software Limited are associated (or correlated) with Bosch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Limited has no effect on the direction of Compucom Software i.e., Compucom Software and Bosch go up and down completely randomly.

Pair Corralation between Compucom Software and Bosch

Assuming the 90 days trading horizon Compucom Software is expected to generate 5.0 times less return on investment than Bosch. In addition to that, Compucom Software is 1.61 times more volatile than Bosch Limited. It trades about 0.03 of its total potential returns per unit of risk. Bosch Limited is currently generating about 0.22 per unit of volatility. If you would invest  3,099,926  in Bosch Limited on May 14, 2025 and sell it today you would earn a total of  771,074  from holding Bosch Limited or generate 24.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Compucom Software Limited  vs.  Bosch Limited

Compucom Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compucom Software Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Compucom Software is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Bosch Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bosch Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Bosch unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compucom Software and Bosch

The main advantage of trading using opposite Compucom Software and Bosch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compucom Software position performs unexpectedly, Bosch 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 Bosch will offset losses from the drop in Bosch's long position.

The idea behind Compucom Software Limited and Bosch Limited 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.