Correlation Between Entegris and Asure Software

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

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

Diversification Opportunities for Entegris and Asure Software

-0.16

Correlation Coefficient

Entegris  Asure Software

Good diversification

The 3 months correlation between Entegris and Asure is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Entegris 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 Entegris 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 Entegris i.e., Entegris and Asure Software go up and down completely randomly.

Pair Corralation between Entegris and Asure Software

Given the investment horizon of 90 days Entegris is expected to under-perform the Asure Software. But the stock apears to be less risky and, when comparing its historical volatility, Entegris is 1.27 times less risky than Asure Software. The stock trades about -0.03 of its potential returns per unit of risk. The Asure Software is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  931.00  in Asure Software on October 11, 2024 and sell it today you would earn a total of  202.00  from holding Asure Software or generate 21.7% return on investment over 90 days.

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

Entegris  vs.  Asure Software

Entegris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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.

Pair Trading with Entegris and Asure Software

The main advantage of trading using opposite Entegris and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris 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 Entegris 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.