Correlation Between EMBARK EDUCATION and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and ASURE SOFTWARE, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and ASURE SOFTWARE.
Diversification Opportunities for EMBARK EDUCATION and ASURE SOFTWARE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EMBARK and ASURE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and ASURE SOFTWARE
Assuming the 90 days horizon EMBARK EDUCATION is expected to generate 3.15 times less return on investment than ASURE SOFTWARE. But when comparing it to its historical volatility, EMBARK EDUCATION LTD is 3.79 times less risky than ASURE SOFTWARE. It trades about 0.12 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 690.00 in ASURE SOFTWARE on September 2, 2024 and sell it today you would earn a total of 230.00 from holding ASURE SOFTWARE or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. ASURE SOFTWARE
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| ASURE SOFTWARE |
EMBARK EDUCATION and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and ASURE SOFTWARE
The main advantage of trading using opposite EMBARK EDUCATION and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. Superior Plus Corp | EMBARK EDUCATION vs. NMI Holdings | EMBARK EDUCATION vs. Origin Agritech | EMBARK EDUCATION vs. SIVERS SEMICONDUCTORS AB |
| ASURE SOFTWARE vs. Singapore Telecommunications Limited | ASURE SOFTWARE vs. Wyndham Hotels Resorts | ASURE SOFTWARE vs. SK TELECOM TDADR | ASURE SOFTWARE vs. Meli Hotels International |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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