Correlation Between Greenfire Resources and Asure Software

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

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

Diversification Opportunities for Greenfire Resources and Asure Software

-0.29

Correlation Coefficient

Greenfire Resources  Asure Software

Very good diversification

The 3 months correlation between Greenfire and Asure is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Greenfire Resources and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Greenfire Resources 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 Greenfire Resources 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 Greenfire Resources i.e., Greenfire Resources and Asure Software go up and down completely randomly.

Pair Corralation between Greenfire Resources and Asure Software

Considering the 90-day investment horizon Greenfire Resources is expected to under-perform the Asure Software. In addition to that, Greenfire Resources is 1.08 times more volatile than Asure Software. It trades about -0.15 of its total potential returns per unit of risk. Asure Software is currently generating about 0.26 per unit of volatility. If you would invest  865.00  in Asure Software on September 15, 2024 and sell it today you would earn a total of  105.00  from holding Asure Software or generate 12.14% return on investment over 90 days.

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

Greenfire Resources  vs.  Asure Software

Greenfire Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenfire Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Asure Software

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Asure Software may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Greenfire Resources and Asure Software

The main advantage of trading using opposite Greenfire Resources and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenfire Resources 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 Greenfire Resources 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.