Correlation Between Asure Software and DHI

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

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

Diversification Opportunities for Asure Software and DHI

0.81

Correlation Coefficient

Asure Software  DHI

Very poor diversification

The 3 months correlation between Asure and DHI is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and Asure Software 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 Asure Software are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Asure Software i.e., Asure Software and DHI go up and down completely randomly.

Pair Corralation between Asure Software and DHI

Given the investment horizon of 90 days Asure Software is expected to under-perform the DHI. But the stock apears to be less risky and, when comparing its historical volatility, Asure Software is 2.72 times less risky than DHI. The stock trades about -0.28 of its potential returns per unit of risk. The DHI Group is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  269.00  in DHI Group on December 4, 2024 and sell it today you would lose (34.00) from holding DHI Group or give up 12.64% of portfolio value over 90 days.

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

Asure Software  vs.  DHI Group

Asure Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DHI Group

Risk-Adjusted Performance

OK

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

Pair Trading with Asure Software and DHI

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

The idea behind Asure Software and DHI Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.