Correlation Between Kamat Hotels and Compucom Software

Can any of the company-specific risk be diversified away by investing in both Kamat Hotels and Compucom Software 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 Kamat Hotels and Compucom Software into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kamat Hotels Limited and Compucom Software Limited, you can compare the effects of market volatilities on Kamat Hotels and Compucom Software 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 Kamat Hotels with a short position of Compucom Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamat Hotels and Compucom Software.

Diversification Opportunities for Kamat Hotels and Compucom Software

-0.38

Correlation Coefficient

Kamat Hotels  Compucom Software

Very good diversification

The 3 months correlation between Kamat and Compucom is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kamat Hotels Limited and Compucom Software Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compucom Software and Kamat Hotels 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 Kamat Hotels Limited are associated (or correlated) with Compucom Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compucom Software has no effect on the direction of Kamat Hotels i.e., Kamat Hotels and Compucom Software go up and down completely randomly.

Pair Corralation between Kamat Hotels and Compucom Software

Assuming the 90 days trading horizon Kamat Hotels Limited is expected to under-perform the Compucom Software. But the stock apears to be less risky and, when comparing its historical volatility, Kamat Hotels Limited is 1.12 times less risky than Compucom Software. The stock trades about -0.08 of its potential returns per unit of risk. The Compucom Software Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,012  in Compucom Software Limited on April 22, 2025 and sell it today you would earn a total of  179.00  from holding Compucom Software Limited or generate 8.9% return on investment over 90 days.

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

Kamat Hotels Limited  vs.  Compucom Software Limited

Kamat Hotels Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kamat Hotels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

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

Pair Trading with Kamat Hotels and Compucom Software

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

The idea behind Kamat Hotels Limited and Compucom Software 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.