Correlation Between National Beverage and Asure Software

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

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

Diversification Opportunities for National Beverage and Asure Software

0.27

Correlation Coefficient

National Beverage  Asure Software

Modest diversification

The 3 months correlation between National and Asure is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and Asure Software go up and down completely randomly.

Pair Corralation between National Beverage and Asure Software

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the Asure Software. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.09 times less risky than Asure Software. The stock trades about -0.09 of its potential returns per unit of risk. The Asure Software is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  897.00  in Asure Software on September 21, 2024 and sell it today you would earn a total of  15.00  from holding Asure Software or generate 1.67% return on investment over 90 days.

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

National Beverage Corp  vs.  Asure Software

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, National Beverage is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Asure Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asure Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Asure Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with National Beverage and Asure Software

The main advantage of trading using opposite National Beverage and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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 National Beverage Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.