Correlation Between Bowhead Specialty and Asure Software

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Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty and Asure Software 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 Bowhead Specialty and Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowhead Specialty Holdings and Asure Software, you can compare the effects of market volatilities on Bowhead Specialty and Asure Software 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 Bowhead Specialty with a short position of Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Asure Software.

Diversification Opportunities for Bowhead Specialty and Asure Software

BowheadAsureDiversified AwayBowheadAsureDiversified Away100%
0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Bowhead and Asure is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and Asure Software go up and down completely randomly.

Pair Corralation between Bowhead Specialty and Asure Software

Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.66 times more return on investment than Asure Software. However, Bowhead Specialty Holdings is 1.51 times less risky than Asure Software. It trades about 0.18 of its potential returns per unit of risk. Asure Software is currently generating about 0.01 per unit of risk. If you would invest  2,769  in Bowhead Specialty Holdings on September 27, 2024 and sell it today you would earn a total of  711.00  from holding Bowhead Specialty Holdings or generate 25.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bowhead Specialty Holdings  vs.  Asure Software

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15BOW ASUR
       Timeline  
Bowhead Specialty 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Bowhead Specialty showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecDec2830323436
Asure Software 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 1 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecDec7.588.599.510

Bowhead Specialty and Asure Software Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.19-4.64-3.08-1.530.01.643.345.046.748.44 0.020.040.060.08
JavaScript chart by amCharts 3.21.15BOW ASUR
       Returns  

Pair Trading with Bowhead Specialty and Asure Software

The main advantage of trading using opposite Bowhead Specialty and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.
The idea behind Bowhead Specialty Holdings and Asure Software 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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