Correlation Between Highlight Communications and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and ASURE SOFTWARE, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and ASURE SOFTWARE.
Diversification Opportunities for Highlight Communications and ASURE SOFTWARE
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and ASURE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Highlight Communications and ASURE SOFTWARE
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the ASURE SOFTWARE. In addition to that, Highlight Communications is 1.13 times more volatile than ASURE SOFTWARE. It trades about -0.08 of its total potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.05 per unit of volatility. If you would invest 730.00 in ASURE SOFTWARE on September 2, 2024 and sell it today you would earn a total of 190.00 from holding ASURE SOFTWARE or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. ASURE SOFTWARE
Performance |
| Timeline |
| Highlight Communications |
| ASURE SOFTWARE |
Highlight Communications and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and ASURE SOFTWARE
The main advantage of trading using opposite Highlight Communications and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Netflix | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp | Highlight Communications vs. NMI Holdings |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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