Correlation Between Asana and EPlus
Can any of the company-specific risk be diversified away by investing in both Asana and EPlus 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 Asana and EPlus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asana Inc and ePlus inc, you can compare the effects of market volatilities on Asana and EPlus 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 Asana with a short position of EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asana and EPlus.
Diversification Opportunities for Asana and EPlus
Excellent diversification
The 3 months correlation between Asana and EPlus is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Asana Inc and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus inc and Asana 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 Asana Inc are associated (or correlated) with EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Asana i.e., Asana and EPlus go up and down completely randomly.
Pair Corralation between Asana and EPlus
Given the investment horizon of 90 days Asana Inc is expected to generate 1.19 times more return on investment than EPlus. However, Asana is 1.19 times more volatile than ePlus inc. It trades about 0.05 of its potential returns per unit of risk. ePlus inc is currently generating about 0.04 per unit of risk. If you would invest 1,341 in Asana Inc on August 30, 2024 and sell it today you would earn a total of 174.00 from holding Asana Inc or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asana Inc vs. ePlus inc
Performance |
| Timeline |
| Asana Inc |
| ePlus inc |
Asana and EPlus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asana and EPlus
The main advantage of trading using opposite Asana and EPlus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asana position performs unexpectedly, EPlus 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 EPlus will offset losses from the drop in EPlus' long position.The idea behind Asana Inc and ePlus inc 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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