Correlation Between ArcelorMittal and Asure Software

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

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

Diversification Opportunities for ArcelorMittal and Asure Software

-0.11

Correlation Coefficient

ArcelorMittal  Asure Software

Good diversification

The 3 months correlation between ArcelorMittal and Asure is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and ArcelorMittal 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 ArcelorMittal SA ADR 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 ArcelorMittal i.e., ArcelorMittal and Asure Software go up and down completely randomly.

Pair Corralation between ArcelorMittal and Asure Software

Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to under-perform the Asure Software. But the stock apears to be less risky and, when comparing its historical volatility, ArcelorMittal SA ADR is 1.52 times less risky than Asure Software. The stock trades about 0.0 of its potential returns per unit of risk. The Asure Software is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  933.00  in Asure Software on September 21, 2024 and sell it today you would lose (19.00) from holding Asure Software or give up 2.04% of portfolio value over 90 days.

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

ArcelorMittal SA ADR  vs.  Asure Software

ArcelorMittal SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ArcelorMittal SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ArcelorMittal is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private 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 ArcelorMittal and Asure Software

The main advantage of trading using opposite ArcelorMittal and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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 ArcelorMittal SA ADR 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.