Correlation Between Asure Software and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Asure Software and NSTAR Electric 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 NSTAR Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asure Software and NSTAR Electric, you can compare the effects of market volatilities on Asure Software and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and NSTAR Electric.
Diversification Opportunities for Asure Software and NSTAR Electric
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asure and NSTAR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Asure Software i.e., Asure Software and NSTAR Electric go up and down completely randomly.
Pair Corralation between Asure Software and NSTAR Electric
Given the investment horizon of 90 days Asure Software is expected to generate 6.14 times more return on investment than NSTAR Electric. However, Asure Software is 6.14 times more volatile than NSTAR Electric. It trades about 0.27 of its potential returns per unit of risk. NSTAR Electric is currently generating about -0.32 per unit of risk. If you would invest 954.00 in Asure Software on October 12, 2024 and sell it today you would earn a total of 179.00 from holding Asure Software or generate 18.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asure Software vs. NSTAR Electric
Performance |
| Timeline |
| Asure Software |
| NSTAR Electric |
Asure Software and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asure Software and NSTAR Electric
The main advantage of trading using opposite Asure Software and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric's long position.| Asure Software vs. Alkami Technology | Asure Software vs. Blackbaud | Asure Software vs. Enfusion | Asure Software vs. Clearwater Analytics Holdings |
| NSTAR Electric vs. GameStop Corp | NSTAR Electric vs. Paysafe | NSTAR Electric vs. Asure Software | NSTAR Electric vs. Take Two Interactive Software |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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