Correlation Between Asure Software and Enlight Renewable

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

By analyzing existing cross correlation between Asure Software and Enlight Renewable Energy, you can compare the effects of market volatilities on Asure Software and Enlight Renewable 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 Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and Enlight Renewable.

Diversification Opportunities for Asure Software and Enlight Renewable

0.36

Correlation Coefficient

Asure Software  Enlight Renewable

Weak diversification

The 3 months correlation between Asure and Enlight is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy 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 Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Asure Software i.e., Asure Software and Enlight Renewable go up and down completely randomly.

Pair Corralation between Asure Software and Enlight Renewable

Given the investment horizon of 90 days Asure Software is expected to generate 36.98 times less return on investment than Enlight Renewable. But when comparing it to its historical volatility, Asure Software is 15.82 times less risky than Enlight Renewable. It trades about 0.02 of its potential returns per unit of risk. Enlight Renewable Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  198.00  in Enlight Renewable Energy on October 11, 2024 and sell it today you would earn a total of  1,500  from holding Enlight Renewable Energy or generate 757.58% return on investment over 90 days.

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

Asure Software  vs.  Enlight Renewable Energy

Asure Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Enlight Renewable Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Enlight Renewable may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Asure Software and Enlight Renewable

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

The idea behind Asure Software and Enlight Renewable Energy 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.