Correlation Between Compucom Software and Voltas

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

Diversification Opportunities for Compucom Software and Voltas

0.33

Correlation Coefficient

Compucom Software  Voltas

Weak diversification

The 3 months correlation between Compucom and Voltas is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Compucom Software Limited and Voltas Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltas 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 Voltas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltas Limited has no effect on the direction of Compucom Software i.e., Compucom Software and Voltas go up and down completely randomly.

Pair Corralation between Compucom Software and Voltas

Assuming the 90 days trading horizon Compucom Software Limited is expected to generate 1.92 times more return on investment than Voltas. However, Compucom Software is 1.92 times more volatile than Voltas Limited. It trades about 0.06 of its potential returns per unit of risk. Voltas Limited is currently generating about 0.08 per unit of risk. If you would invest  2,001  in Compucom Software Limited on April 23, 2025 and sell it today you would earn a total of  190.00  from holding Compucom Software Limited or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Compucom Software Limited  vs.  Voltas 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 5 (%) 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.

Voltas Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voltas Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Voltas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Compucom Software and Voltas

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

The idea behind Compucom Software Limited and Voltas 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.