Correlation Between KNOT Offshore and Asure Software

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

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

Diversification Opportunities for KNOT Offshore and Asure Software

0.16

Correlation Coefficient

KNOT Offshore  Asure Software

Average diversification

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

Pair Corralation between KNOT Offshore and Asure Software

Given the investment horizon of 90 days KNOT Offshore is expected to generate 1.98 times less return on investment than Asure Software. But when comparing it to its historical volatility, KNOT Offshore Partners is 1.68 times less risky than Asure Software. It trades about 0.05 of its potential returns per unit of risk. Asure Software is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  914.00  in Asure Software on December 19, 2024 and sell it today you would earn a total of  74.00  from holding Asure Software or generate 8.1% return on investment over 90 days.

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

KNOT Offshore Partners  vs.  Asure Software

KNOT Offshore Partners

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KNOT Offshore Partners are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, KNOT Offshore is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Asure Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 4 (%) 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 KNOT Offshore and Asure Software

The main advantage of trading using opposite KNOT Offshore and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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 KNOT Offshore Partners 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.