Correlation Between Computer Age and V2 Retail

Can any of the company-specific risk be diversified away by investing in both Computer Age and V2 Retail 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 Computer Age and V2 Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Computer Age Management and V2 Retail Limited, you can compare the effects of market volatilities on Computer Age and V2 Retail 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 Computer Age with a short position of V2 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Age and V2 Retail.

Diversification Opportunities for Computer Age and V2 Retail

0.61

Correlation Coefficient

Computer Age  V2 Retail

Poor diversification

The 3 months correlation between Computer and V2RETAIL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Computer Age Management and V2 Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2 Retail Limited and Computer Age 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 Computer Age Management are associated (or correlated) with V2 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2 Retail Limited has no effect on the direction of Computer Age i.e., Computer Age and V2 Retail go up and down completely randomly.

Pair Corralation between Computer Age and V2 Retail

Assuming the 90 days trading horizon Computer Age Management is expected to generate 0.85 times more return on investment than V2 Retail. However, Computer Age Management is 1.17 times less risky than V2 Retail. It trades about 0.04 of its potential returns per unit of risk. V2 Retail Limited is currently generating about 0.0 per unit of risk. If you would invest  408,312  in Computer Age Management on April 23, 2025 and sell it today you would earn a total of  16,458  from holding Computer Age Management or generate 4.03% return on investment over 90 days.

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

Computer Age Management  vs.  V2 Retail Limited

Computer Age Management

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Age Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Computer Age is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

V2 Retail Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days V2 Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, V2 Retail is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Computer Age and V2 Retail

The main advantage of trading using opposite Computer Age and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Age position performs unexpectedly, V2 Retail 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 V2 Retail will offset losses from the drop in V2 Retail's long position.

The idea behind Computer Age Management and V2 Retail 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.