Correlation Between GVP Infotech and Computer Age

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

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

Diversification Opportunities for GVP Infotech and Computer Age

0.61

Correlation Coefficient

GVP Infotech  Computer Age

Poor diversification

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

Pair Corralation between GVP Infotech and Computer Age

Assuming the 90 days trading horizon GVP Infotech Limited is expected to generate 1.46 times more return on investment than Computer Age. However, GVP Infotech is 1.46 times more volatile than Computer Age Management. It trades about 0.04 of its potential returns per unit of risk. Computer Age Management is currently generating about 0.04 per unit of risk. If you would invest  1,004  in GVP Infotech Limited on April 23, 2025 and sell it today you would earn a total of  48.00  from holding GVP Infotech Limited or generate 4.78% return on investment over 90 days.

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

GVP Infotech Limited  vs.  Computer Age Management

GVP Infotech Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GVP Infotech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, GVP Infotech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with GVP Infotech and Computer Age

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

The idea behind GVP Infotech Limited and Computer Age Management 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.