Correlation Between Compucom Software and Kavveri Telecom

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

Diversification Opportunities for Compucom Software and Kavveri Telecom

0.31

Correlation Coefficient

Compucom Software  Kavveri Telecom

Weak diversification

The 3 months correlation between Compucom and Kavveri is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Kavveri Telecom Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kavveri Telecom Products 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 Kavveri Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kavveri Telecom Products has no effect on the direction of Compucom Software i.e., Compucom Software and Kavveri Telecom go up and down completely randomly.

Pair Corralation between Compucom Software and Kavveri Telecom

Assuming the 90 days trading horizon Compucom Software is expected to generate 4.4 times less return on investment than Kavveri Telecom. But when comparing it to its historical volatility, Compucom Software Limited is 1.06 times less risky than Kavveri Telecom. It trades about 0.04 of its potential returns per unit of risk. Kavveri Telecom Products is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,377  in Kavveri Telecom Products on May 3, 2025 and sell it today you would earn a total of  1,394  from holding Kavveri Telecom Products or generate 31.85% return on investment over 90 days.

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

Compucom Software Limited  vs.  Kavveri Telecom Products

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 3 (%) 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 September 2025.

Kavveri Telecom Products

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kavveri Telecom Products are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Kavveri Telecom demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compucom Software and Kavveri Telecom

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

The idea behind Compucom Software Limited and Kavveri Telecom Products 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.