Correlation Between Harley Davidson and Asure Software

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

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

Diversification Opportunities for Harley Davidson and Asure Software

-0.72

Correlation Coefficient

Harley Davidson  Asure Software

Pay attention - limited upside

The 3 months correlation between Harley and Asure is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Harley Davidson and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Harley Davidson 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 Harley Davidson 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 Harley Davidson i.e., Harley Davidson and Asure Software go up and down completely randomly.

Pair Corralation between Harley Davidson and Asure Software

Considering the 90-day investment horizon Harley Davidson is expected to generate 0.78 times more return on investment than Asure Software. However, Harley Davidson is 1.29 times less risky than Asure Software. It trades about -0.16 of its potential returns per unit of risk. Asure Software is currently generating about -0.28 per unit of risk. If you would invest  2,629  in Harley Davidson on December 4, 2024 and sell it today you would lose (138.00) from holding Harley Davidson or give up 5.25% of portfolio value over 90 days.

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

Harley Davidson  vs.  Asure Software

Harley Davidson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harley Davidson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Asure Software

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Harley Davidson and Asure Software

The main advantage of trading using opposite Harley Davidson and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harley Davidson 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 Harley Davidson 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.