Correlation Between ASURE SOFTWARE and Aptiv PLC

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

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

Diversification Opportunities for ASURE SOFTWARE and Aptiv PLC

-0.37

Correlation Coefficient

ASURE SOFTWARE  Aptiv PLC

Very good diversification

The 3 months correlation between ASURE and Aptiv is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC and ASURE SOFTWARE 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 ASURE SOFTWARE are associated (or correlated) with Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and Aptiv PLC go up and down completely randomly.

Pair Corralation between ASURE SOFTWARE and Aptiv PLC

Assuming the 90 days trading horizon ASURE SOFTWARE is expected to under-perform the Aptiv PLC. In addition to that, ASURE SOFTWARE is 2.61 times more volatile than Aptiv PLC. It trades about -0.02 of its total potential returns per unit of risk. Aptiv PLC is currently generating about 0.22 per unit of volatility. If you would invest  5,326  in Aptiv PLC on October 4, 2024 and sell it today you would earn a total of  161.00  from holding Aptiv PLC or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

ASURE SOFTWARE  vs.  Aptiv PLC

ASURE SOFTWARE

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASURE SOFTWARE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ASURE SOFTWARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aptiv PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptiv PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ASURE SOFTWARE and Aptiv PLC

The main advantage of trading using opposite ASURE SOFTWARE and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, Aptiv PLC 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 Aptiv PLC will offset losses from the drop in Aptiv PLC's long position.

The idea behind ASURE SOFTWARE and Aptiv PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.