Correlation Between Asure Software and Valneva SE

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

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

Diversification Opportunities for Asure Software and Valneva SE

-0.43

Correlation Coefficient

Asure Software  Valneva SE

Very good diversification

The 3 months correlation between Asure and Valneva is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of Asure Software i.e., Asure Software and Valneva SE go up and down completely randomly.

Pair Corralation between Asure Software and Valneva SE

Given the investment horizon of 90 days Asure Software is expected to generate 1.17 times more return on investment than Valneva SE. However, Asure Software is 1.17 times more volatile than Valneva SE ADR. It trades about 0.09 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.34 per unit of risk. If you would invest  839.00  in Asure Software on September 2, 2024 and sell it today you would earn a total of  140.00  from holding Asure Software or generate 16.69% return on investment over 90 days.

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

Asure Software  vs.  Valneva SE ADR

Asure Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Asure Software and Valneva SE

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

The idea behind Asure Software and Valneva SE ADR 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.