Correlation Between Syrma SGS and Compucom Software

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

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

Diversification Opportunities for Syrma SGS and Compucom Software

0.4

Correlation Coefficient

Syrma SGS  Compucom Software

Very weak diversification

The 3 months correlation between Syrma and Compucom is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Syrma SGS Technology and Compucom Software Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compucom Software and Syrma SGS 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 Syrma SGS Technology 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 Syrma SGS i.e., Syrma SGS and Compucom Software go up and down completely randomly.

Pair Corralation between Syrma SGS and Compucom Software

Assuming the 90 days trading horizon Syrma SGS Technology is expected to generate 1.0 times more return on investment than Compucom Software. However, Syrma SGS Technology is 1.0 times less risky than Compucom Software. It trades about 0.22 of its potential returns per unit of risk. Compucom Software Limited is currently generating about 0.08 per unit of risk. If you would invest  48,975  in Syrma SGS Technology on April 25, 2025 and sell it today you would earn a total of  21,635  from holding Syrma SGS Technology or generate 44.18% return on investment over 90 days.

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

Syrma SGS Technology  vs.  Compucom Software Limited

Syrma SGS Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Syrma SGS Technology are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Syrma SGS displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Syrma SGS and Compucom Software

The main advantage of trading using opposite Syrma SGS and Compucom Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syrma SGS 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 Syrma SGS Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.