Correlation Between Mamas Creations and Asure Software

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

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

Diversification Opportunities for Mamas Creations and Asure Software

-0.04

Correlation Coefficient

Mamas Creations  Asure Software

Good diversification

The 3 months correlation between Mamas and Asure is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Mamas Creations 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 Mamas Creations 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 Mamas Creations i.e., Mamas Creations and Asure Software go up and down completely randomly.

Pair Corralation between Mamas Creations and Asure Software

Given the investment horizon of 90 days Mamas Creations is expected to under-perform the Asure Software. In addition to that, Mamas Creations is 1.04 times more volatile than Asure Software. It trades about -0.06 of its total potential returns per unit of risk. Asure Software is currently generating about 0.08 per unit of volatility. If you would invest  912.00  in Asure Software on December 20, 2024 and sell it today you would earn a total of  120.00  from holding Asure Software or generate 13.16% return on investment over 90 days.

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

Mamas Creations  vs.  Asure Software

Mamas Creations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mamas Creations 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 primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Asure Software

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 6 (%) 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 Mamas Creations and Asure Software

The main advantage of trading using opposite Mamas Creations and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations 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 Mamas Creations 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.