Correlation Between ONWARD MEDICAL and ASURE SOFTWARE

Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL and ASURE 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 ONWARD MEDICAL and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ONWARD MEDICAL BV and ASURE SOFTWARE, you can compare the effects of market volatilities on ONWARD MEDICAL and ASURE 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 ONWARD MEDICAL with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and ASURE SOFTWARE.

Diversification Opportunities for ONWARD MEDICAL and ASURE SOFTWARE

-0.22

Correlation Coefficient

ONWARD MEDICAL  ASURE SOFTWARE

Very good diversification

The 3 months correlation between ONWARD and ASURE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and ONWARD MEDICAL 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 ONWARD MEDICAL BV are associated (or correlated) with ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of ONWARD MEDICAL i.e., ONWARD MEDICAL and ASURE SOFTWARE go up and down completely randomly.

Pair Corralation between ONWARD MEDICAL and ASURE SOFTWARE

Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 2.52 times more return on investment than ASURE SOFTWARE. However, ONWARD MEDICAL is 2.52 times more volatile than ASURE SOFTWARE. It trades about 0.06 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.05 per unit of risk. If you would invest  285.00  in ONWARD MEDICAL BV on October 9, 2024 and sell it today you would earn a total of  211.00  from holding ONWARD MEDICAL BV or generate 74.04% return on investment over 90 days.

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

ONWARD MEDICAL BV  vs.  ASURE SOFTWARE

ONWARD MEDICAL BV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ONWARD MEDICAL BV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ONWARD MEDICAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ASURE SOFTWARE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASURE SOFTWARE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ASURE SOFTWARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ONWARD MEDICAL and ASURE SOFTWARE

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

The idea behind ONWARD MEDICAL BV and ASURE SOFTWARE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.