Correlation Between Compucom Software and Gujarat Lease

Can any of the company-specific risk be diversified away by investing in both Compucom Software and Gujarat Lease 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 Gujarat Lease 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 Gujarat Lease Financing, you can compare the effects of market volatilities on Compucom Software and Gujarat Lease 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 Gujarat Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compucom Software and Gujarat Lease.

Diversification Opportunities for Compucom Software and Gujarat Lease

-0.18

Correlation Coefficient

Compucom Software  Gujarat Lease

Good diversification

The 3 months correlation between Compucom and Gujarat is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Gujarat Lease Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Lease Financing 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 Gujarat Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Lease Financing has no effect on the direction of Compucom Software i.e., Compucom Software and Gujarat Lease go up and down completely randomly.

Pair Corralation between Compucom Software and Gujarat Lease

Assuming the 90 days trading horizon Compucom Software Limited is expected to generate 0.93 times more return on investment than Gujarat Lease. However, Compucom Software Limited is 1.08 times less risky than Gujarat Lease. It trades about 0.06 of its potential returns per unit of risk. Gujarat Lease Financing is currently generating about 0.02 per unit of risk. If you would invest  1,982  in Compucom Software Limited on May 1, 2025 and sell it today you would earn a total of  153.00  from holding Compucom Software Limited or generate 7.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compucom Software Limited  vs.  Gujarat Lease Financing

Compucom Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Compucom Software Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Compucom Software may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Gujarat Lease Financing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Lease Financing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gujarat Lease is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Compucom Software and Gujarat Lease

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

The idea behind Compucom Software Limited and Gujarat Lease Financing 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.