Correlation Between Asure Software and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Asure Software and Kontoor Brands 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 Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asure Software and Kontoor Brands, you can compare the effects of market volatilities on Asure Software and Kontoor Brands 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 Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and Kontoor Brands.
Diversification Opportunities for Asure Software and Kontoor Brands
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asure and Kontoor is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands 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 Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Asure Software i.e., Asure Software and Kontoor Brands go up and down completely randomly.
Pair Corralation between Asure Software and Kontoor Brands
Given the investment horizon of 90 days Asure Software is expected to generate 3.85 times less return on investment than Kontoor Brands. In addition to that, Asure Software is 1.48 times more volatile than Kontoor Brands. It trades about 0.04 of its total potential returns per unit of risk. Kontoor Brands is currently generating about 0.25 per unit of volatility. If you would invest 7,706 in Kontoor Brands on August 30, 2024 and sell it today you would earn a total of 1,364 from holding Kontoor Brands or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asure Software vs. Kontoor Brands
Performance |
| Timeline |
| Asure Software |
| Kontoor Brands |
Asure Software and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asure Software and Kontoor Brands
The main advantage of trading using opposite Asure Software and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Asure Software vs. Alkami Technology | Asure Software vs. Blackbaud | Asure Software vs. Enfusion | Asure Software vs. Clearwater Analytics Holdings |
| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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