Correlation Between CompuLab and Razor Labs
Can any of the company-specific risk be diversified away by investing in both CompuLab and Razor Labs 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 CompuLab and Razor Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuLab and Razor Labs, you can compare the effects of market volatilities on CompuLab and Razor Labs 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 CompuLab with a short position of Razor Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuLab and Razor Labs.
Diversification Opportunities for CompuLab and Razor Labs
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuLab and Razor is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CompuLab and Razor Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Razor Labs and CompuLab 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 CompuLab are associated (or correlated) with Razor Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Razor Labs has no effect on the direction of CompuLab i.e., CompuLab and Razor Labs go up and down completely randomly.
Pair Corralation between CompuLab and Razor Labs
Assuming the 90 days trading horizon CompuLab is expected to generate 3.81 times less return on investment than Razor Labs. But when comparing it to its historical volatility, CompuLab is 2.74 times less risky than Razor Labs. It trades about 0.09 of its potential returns per unit of risk. Razor Labs is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 41,550 in Razor Labs on October 4, 2025 and sell it today you would earn a total of 16,920 from holding Razor Labs or generate 40.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuLab vs. Razor Labs
Performance |
| Timeline |
| CompuLab |
| Razor Labs |
CompuLab and Razor Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuLab and Razor Labs
The main advantage of trading using opposite CompuLab and Razor Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuLab position performs unexpectedly, Razor Labs 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 Razor Labs will offset losses from the drop in Razor Labs' long position.The idea behind CompuLab and Razor Labs 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.| Razor Labs vs. Payment Financial Technologies | Razor Labs vs. LivePerson | Razor Labs vs. Orad M | Razor Labs vs. Utron |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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