Correlation Between Compucom Software and Garware Hi

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

Diversification Opportunities for Compucom Software and Garware Hi

0.78

Correlation Coefficient

Compucom Software  Garware Hi

Poor diversification

The 3 months correlation between Compucom and Garware is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Garware Hi Tech Films in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garware Hi Tech 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 Garware Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garware Hi Tech has no effect on the direction of Compucom Software i.e., Compucom Software and Garware Hi go up and down completely randomly.

Pair Corralation between Compucom Software and Garware Hi

Assuming the 90 days trading horizon Compucom Software Limited is expected to generate 0.66 times more return on investment than Garware Hi. However, Compucom Software Limited is 1.51 times less risky than Garware Hi. It trades about -0.04 of its potential returns per unit of risk. Garware Hi Tech Films is currently generating about -0.18 per unit of risk. If you would invest  2,210  in Compucom Software Limited on April 24, 2025 and sell it today you would lose (27.00) from holding Compucom Software Limited or give up 1.22% of portfolio value over 90 days.

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

Compucom Software Limited  vs.  Garware Hi Tech Films

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 unfluctuating basic indicators, Compucom Software may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Garware Hi Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Garware Hi Tech Films are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Garware Hi may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Compucom Software and Garware Hi

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

The idea behind Compucom Software Limited and Garware Hi Tech Films 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.