Correlation Between LEGAL GENERAL and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both LEGAL GENERAL 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 LEGAL GENERAL and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEGAL GENERAL and ASURE SOFTWARE, you can compare the effects of market volatilities on LEGAL GENERAL 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 LEGAL GENERAL with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEGAL GENERAL and ASURE SOFTWARE.
Diversification Opportunities for LEGAL GENERAL and ASURE SOFTWARE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LEGAL and ASURE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LEGAL GENERAL and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and LEGAL GENERAL 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 LEGAL GENERAL 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 LEGAL GENERAL i.e., LEGAL GENERAL and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between LEGAL GENERAL and ASURE SOFTWARE
Assuming the 90 days trading horizon LEGAL GENERAL is expected to generate 3.38 times less return on investment than ASURE SOFTWARE. But when comparing it to its historical volatility, LEGAL GENERAL is 2.27 times less risky than ASURE SOFTWARE. It trades about 0.02 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 880.00 in ASURE SOFTWARE on October 11, 2024 and sell it today you would earn a total of 210.00 from holding ASURE SOFTWARE or generate 23.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEGAL GENERAL vs. ASURE SOFTWARE
Performance |
| Timeline |
| LEGAL GENERAL |
| ASURE SOFTWARE |
LEGAL GENERAL and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEGAL GENERAL and ASURE SOFTWARE
The main advantage of trading using opposite LEGAL GENERAL and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEGAL GENERAL 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.| LEGAL GENERAL vs. ASURE SOFTWARE | LEGAL GENERAL vs. Guidewire Software | LEGAL GENERAL vs. Easy Software AG | LEGAL GENERAL vs. Take Two Interactive Software |
| ASURE SOFTWARE vs. INTERSHOP Communications Aktiengesellschaft | ASURE SOFTWARE vs. United Natural Foods | ASURE SOFTWARE vs. Singapore Telecommunications Limited | ASURE SOFTWARE vs. EBRO FOODS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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