Correlation Between Asure Software and HONEYWELL

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

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

Diversification Opportunities for Asure Software and HONEYWELL

-0.54

Correlation Coefficient

Asure Software  HONEYWELL

Excellent diversification

The 3 months correlation between Asure and HONEYWELL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and HONEYWELL INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTERNATIONAL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTERNATIONAL has no effect on the direction of Asure Software i.e., Asure Software and HONEYWELL go up and down completely randomly.

Pair Corralation between Asure Software and HONEYWELL

Given the investment horizon of 90 days Asure Software is expected to generate 4.4 times less return on investment than HONEYWELL. In addition to that, Asure Software is 1.11 times more volatile than HONEYWELL INTERNATIONAL INC. It trades about 0.03 of its total potential returns per unit of risk. HONEYWELL INTERNATIONAL INC is currently generating about 0.13 per unit of volatility. If you would invest  6,325  in HONEYWELL INTERNATIONAL INC on December 29, 2024 and sell it today you would earn a total of  1,202  from holding HONEYWELL INTERNATIONAL INC or generate 19.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.69%
Values	Daily Returns

Asure Software  vs.  HONEYWELL INTERNATIONAL INC

Asure Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 2 (%) 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.

HONEYWELL INTERNATIONAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HONEYWELL INTERNATIONAL INC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HONEYWELL sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asure Software and HONEYWELL

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

The idea behind Asure Software and HONEYWELL INTERNATIONAL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.