Correlation Between ASURE SOFTWARE and POSBO UNSPADRS/20YC1
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and POSBO UNSPADRS20YC1, you can compare the effects of market volatilities on ASURE SOFTWARE and POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and POSBO UNSPADRS/20YC1.
Diversification Opportunities for ASURE SOFTWARE and POSBO UNSPADRS/20YC1
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASURE and POSBO is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and POSBO UNSPADRS20YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSBO UNSPADRS/20YC1 has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and POSBO UNSPADRS/20YC1 go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and POSBO UNSPADRS/20YC1
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 2.74 times more return on investment than POSBO UNSPADRS/20YC1. However, ASURE SOFTWARE is 2.74 times more volatile than POSBO UNSPADRS20YC1. It trades about 0.21 of its potential returns per unit of risk. POSBO UNSPADRS20YC1 is currently generating about 0.1 per unit of risk. If you would invest 770.00 in ASURE SOFTWARE on September 5, 2024 and sell it today you would earn a total of 140.00 from holding ASURE SOFTWARE or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASURE SOFTWARE vs. POSBO UNSPADRS20YC1
Performance |
| Timeline |
| ASURE SOFTWARE |
| POSBO UNSPADRS/20YC1 |
ASURE SOFTWARE and POSBO UNSPADRS/20YC1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and POSBO UNSPADRS/20YC1
The main advantage of trading using opposite ASURE SOFTWARE and POSBO UNSPADRS/20YC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 will offset losses from the drop in POSBO UNSPADRS/20YC1's long position.| ASURE SOFTWARE vs. Eastman Chemical | ASURE SOFTWARE vs. Ares Management Corp | ASURE SOFTWARE vs. China BlueChemical | ASURE SOFTWARE vs. NISSAN CHEMICAL IND |
| POSBO UNSPADRS/20YC1 vs. The Hanover Insurance | POSBO UNSPADRS/20YC1 vs. Singapore Reinsurance | POSBO UNSPADRS/20YC1 vs. X FAB Silicon Foundries | POSBO UNSPADRS/20YC1 vs. VIVA WINE GROUP |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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