Correlation Between AKITA Drilling and Asure Software

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

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

Diversification Opportunities for AKITA Drilling and Asure Software

-0.16

Correlation Coefficient

AKITA Drilling  Asure Software

Good diversification

The 3 months correlation between AKITA and Asure is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and Asure Software go up and down completely randomly.

Pair Corralation between AKITA Drilling and Asure Software

Assuming the 90 days horizon AKITA Drilling is expected to generate 0.63 times more return on investment than Asure Software. However, AKITA Drilling is 1.59 times less risky than Asure Software. It trades about -0.1 of its potential returns per unit of risk. Asure Software is currently generating about -0.17 per unit of risk. If you would invest  118.00  in AKITA Drilling on September 25, 2024 and sell it today you would lose (3.00) from holding AKITA Drilling or give up 2.54% of portfolio value over 90 days.

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

AKITA Drilling  vs.  Asure Software

AKITA Drilling

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AKITA Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Asure Software

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Asure Software is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AKITA Drilling and Asure Software

The main advantage of trading using opposite AKITA Drilling and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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 AKITA Drilling 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..