Correlation Between Frontier Group and Asure Software

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

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

Diversification Opportunities for Frontier Group and Asure Software

0.43

Correlation Coefficient

Frontier Group  Asure Software

Very weak diversification

The 3 months correlation between Frontier and Asure is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Group Holdings and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Frontier Group 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 Frontier Group Holdings 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 Frontier Group i.e., Frontier Group and Asure Software go up and down completely randomly.

Pair Corralation between Frontier Group and Asure Software

Given the investment horizon of 90 days Frontier Group is expected to generate 1.59 times less return on investment than Asure Software. In addition to that, Frontier Group is 1.3 times more volatile than Asure Software. It trades about 0.01 of its total potential returns per unit of risk. Asure Software is currently generating about 0.02 per unit of volatility. If you would invest  1,123  in Asure Software on October 10, 2024 and sell it today you would earn a total of  14.00  from holding Asure Software or generate 1.25% return on investment over 90 days.

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

Frontier Group Holdings  vs.  Asure Software

Frontier Group Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Frontier Group Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Frontier Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Asure Software

Risk-Adjusted Performance

11 of 100

OK

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 unfluctuating basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Frontier Group and Asure Software

The main advantage of trading using opposite Frontier Group and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Group 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 Frontier Group Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.