Correlation Between Asure Software and 00108WAF7

Can any of the company-specific risk be diversified away by investing in both Asure Software and 00108WAF7 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 00108WAF7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asure Software and AEP TEX INC, you can compare the effects of market volatilities on Asure Software and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and 00108WAF7.

Diversification Opportunities for Asure Software and 00108WAF7

-0.83

Correlation Coefficient

Asure Software  00108WAF7

Pay attention - limited upside

The 3 months correlation between Asure and 00108WAF7 is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of Asure Software i.e., Asure Software and 00108WAF7 go up and down completely randomly.

Pair Corralation between Asure Software and 00108WAF7

Given the investment horizon of 90 days Asure Software is expected to generate 2.53 times more return on investment than 00108WAF7. However, Asure Software is 2.53 times more volatile than AEP TEX INC. It trades about 0.12 of its potential returns per unit of risk. AEP TEX INC is currently generating about -0.01 per unit of risk. If you would invest  979.00  in Asure Software on November 29, 2024 and sell it today you would earn a total of  170.00  from holding Asure Software or generate 17.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	72.88%
Values	Daily Returns

Asure Software  vs.  AEP TEX INC

Asure Software

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 9 (%) 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.

AEP TEX INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEP TEX INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00108WAF7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Asure Software and 00108WAF7

The main advantage of trading using opposite Asure Software and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.

The idea behind Asure Software and AEP TEX INC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.