Correlation Between Compucom Software and GVP Infotech

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

Diversification Opportunities for Compucom Software and GVP Infotech

0.09

Correlation Coefficient

Compucom Software  GVP Infotech

Significant diversification

The 3 months correlation between Compucom and GVP is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and GVP Infotech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GVP Infotech 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 GVP Infotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GVP Infotech Limited has no effect on the direction of Compucom Software i.e., Compucom Software and GVP Infotech go up and down completely randomly.

Pair Corralation between Compucom Software and GVP Infotech

Assuming the 90 days trading horizon Compucom Software is expected to generate 4.05 times less return on investment than GVP Infotech. But when comparing it to its historical volatility, Compucom Software Limited is 1.41 times less risky than GVP Infotech. It trades about 0.02 of its potential returns per unit of risk. GVP Infotech Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  981.00  in GVP Infotech Limited on May 14, 2025 and sell it today you would earn a total of  87.00  from holding GVP Infotech Limited or generate 8.87% return on investment over 90 days.

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

Compucom Software Limited  vs.  GVP Infotech 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 1 (%) 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.

GVP Infotech Limited

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in GVP Infotech Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, GVP Infotech may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Compucom Software and GVP Infotech

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

The idea behind Compucom Software Limited and GVP Infotech 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.