Correlation Between KINGBOARD CHEMICAL and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and ASURE SOFTWARE, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and ASURE SOFTWARE.
Diversification Opportunities for KINGBOARD CHEMICAL and ASURE SOFTWARE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KINGBOARD and ASURE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and ASURE SOFTWARE
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.15 times more return on investment than ASURE SOFTWARE. However, KINGBOARD CHEMICAL is 1.15 times more volatile than ASURE SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.01 per unit of risk. If you would invest 174.00 in KINGBOARD CHEMICAL on September 1, 2024 and sell it today you would earn a total of 50.00 from holding KINGBOARD CHEMICAL or generate 28.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. ASURE SOFTWARE
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| ASURE SOFTWARE |
KINGBOARD CHEMICAL and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and ASURE SOFTWARE
The main advantage of trading using opposite KINGBOARD CHEMICAL and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. TSOGO SUN GAMING | KINGBOARD CHEMICAL vs. NEWELL RUBBERMAID | KINGBOARD CHEMICAL vs. Boyd Gaming | KINGBOARD CHEMICAL vs. Martin Marietta Materials |
| ASURE SOFTWARE vs. PennyMac Mortgage Investment | ASURE SOFTWARE vs. Autohome ADR | ASURE SOFTWARE vs. bet at home AG | ASURE SOFTWARE vs. NURAN WIRELESS INC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |