Correlation Between Compucom Software and Alkyl Amines

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

Diversification Opportunities for Compucom Software and Alkyl Amines

0.62

Correlation Coefficient

Compucom Software  Alkyl Amines

Poor diversification

The 3 months correlation between Compucom and Alkyl is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Alkyl Amines Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkyl Amines Chemicals 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 Alkyl Amines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkyl Amines Chemicals has no effect on the direction of Compucom Software i.e., Compucom Software and Alkyl Amines go up and down completely randomly.

Pair Corralation between Compucom Software and Alkyl Amines

Assuming the 90 days trading horizon Compucom Software is expected to generate 1.46 times less return on investment than Alkyl Amines. In addition to that, Compucom Software is 1.29 times more volatile than Alkyl Amines Chemicals. It trades about 0.08 of its total potential returns per unit of risk. Alkyl Amines Chemicals is currently generating about 0.14 per unit of volatility. If you would invest  186,901  in Alkyl Amines Chemicals on April 21, 2025 and sell it today you would earn a total of  38,589  from holding Alkyl Amines Chemicals or generate 20.65% return on investment over 90 days.

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

Compucom Software Limited  vs.  Alkyl Amines Chemicals

Compucom Software

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compucom Software Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Compucom Software displayed solid returns over the last few months and may actually be approaching a breakup point.

Alkyl Amines Chemicals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alkyl Amines Chemicals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Alkyl Amines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compucom Software and Alkyl Amines

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

The idea behind Compucom Software Limited and Alkyl Amines Chemicals 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.