Correlation Between SAG Holdings and Asure Software

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

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

Diversification Opportunities for SAG Holdings and Asure Software

0.21

Correlation Coefficient

SAG Holdings  Asure Software

Modest diversification

The 3 months correlation between SAG and Asure is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SAG Holdings Limited and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and SAG Holdings 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 SAG Holdings Limited 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 SAG Holdings i.e., SAG Holdings and Asure Software go up and down completely randomly.

Pair Corralation between SAG Holdings and Asure Software

Considering the 90-day investment horizon SAG Holdings is expected to generate 4.71 times less return on investment than Asure Software. In addition to that, SAG Holdings is 1.51 times more volatile than Asure Software. It trades about 0.05 of its total potential returns per unit of risk. Asure Software is currently generating about 0.32 per unit of volatility. If you would invest  913.00  in Asure Software on October 11, 2024 and sell it today you would earn a total of  220.00  from holding Asure Software or generate 24.1% return on investment over 90 days.

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

SAG Holdings Limited  vs.  Asure Software

SAG Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Asure Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 11 (%) 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 SAG Holdings and Asure Software

The main advantage of trading using opposite SAG Holdings and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAG Holdings 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 SAG Holdings Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.