Correlation Between ASURE SOFTWARE and USU Software

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

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

Diversification Opportunities for ASURE SOFTWARE and USU Software

-0.17

Correlation Coefficient

ASURE SOFTWARE  USU Software

Good diversification

The 3 months correlation between ASURE and USU is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and USU Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USU Software AG 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 USU Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USU Software AG has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and USU Software go up and down completely randomly.

Pair Corralation between ASURE SOFTWARE and USU Software

Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 1.32 times less return on investment than USU Software. In addition to that, ASURE SOFTWARE is 2.6 times more volatile than USU Software AG. It trades about 0.02 of its total potential returns per unit of risk. USU Software AG is currently generating about 0.07 per unit of volatility. If you would invest  2,150  in USU Software AG on December 29, 2024 and sell it today you would earn a total of  110.00  from holding USU Software AG or generate 5.12% return on investment over 90 days.

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

ASURE SOFTWARE  vs.  USU Software AG

ASURE SOFTWARE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASURE SOFTWARE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ASURE SOFTWARE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

USU Software AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in USU Software AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, USU Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASURE SOFTWARE and USU Software

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

The idea behind ASURE SOFTWARE and USU Software AG 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.