Correlation Between Compucom Software and JSW Holdings

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

Diversification Opportunities for Compucom Software and JSW Holdings

-0.42

Correlation Coefficient

Compucom Software  JSW Holdings

Very good diversification

The 3 months correlation between Compucom and JSW is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and JSW Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSW Holdings 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 JSW Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSW Holdings Limited has no effect on the direction of Compucom Software i.e., Compucom Software and JSW Holdings go up and down completely randomly.

Pair Corralation between Compucom Software and JSW Holdings

Assuming the 90 days trading horizon Compucom Software Limited is expected to generate 1.27 times more return on investment than JSW Holdings. However, Compucom Software is 1.27 times more volatile than JSW Holdings Limited. It trades about 0.08 of its potential returns per unit of risk. JSW Holdings Limited is currently generating about -0.11 per unit of risk. If you would invest  1,954  in Compucom Software Limited on April 20, 2025 and sell it today you would earn a total of  237.00  from holding Compucom Software Limited or generate 12.13% return on investment over 90 days.

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

Compucom Software Limited  vs.  JSW Holdings Limited

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 weak basic indicators, Compucom Software displayed solid returns over the last few months and may actually be approaching a breakup point.

JSW Holdings Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days JSW Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Compucom Software and JSW Holdings

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

The idea behind Compucom Software Limited and JSW Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.