Correlation Between SL Green and Asure Software

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

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

Diversification Opportunities for SL Green and Asure Software

0.41

Correlation Coefficient

SL Green  Asure Software

Very weak diversification

The 3 months correlation between SLG and Asure is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and Asure Software go up and down completely randomly.

Pair Corralation between SL Green and Asure Software

Considering the 90-day investment horizon SL Green is expected to generate 3.25 times less return on investment than Asure Software. But when comparing it to its historical volatility, SL Green Realty is 1.52 times less risky than Asure Software. It trades about 0.04 of its potential returns per unit of risk. Asure Software is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Asure Software on October 8, 2024 and sell it today you would earn a total of  110.00  from holding Asure Software or generate 12.87% return on investment over 90 days.

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

SL Green Realty  vs.  Asure Software

SL Green Realty

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Asure Software

Risk-Adjusted Performance

6 of 100

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 SL Green and Asure Software

The main advantage of trading using opposite SL Green and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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 SL Green Realty 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.