Correlation Between ASURE SOFTWARE and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and EMBARK EDUCATION 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 EMBARK EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and EMBARK EDUCATION LTD, you can compare the effects of market volatilities on ASURE SOFTWARE and EMBARK EDUCATION 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 EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and EMBARK EDUCATION.
Diversification Opportunities for ASURE SOFTWARE and EMBARK EDUCATION
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASURE and EMBARK is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD 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 EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and EMBARK EDUCATION
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 5.38 times more return on investment than EMBARK EDUCATION. However, ASURE SOFTWARE is 5.38 times more volatile than EMBARK EDUCATION LTD. It trades about 0.18 of its potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.22 per unit of risk. If you would invest 800.00 in ASURE SOFTWARE on September 2, 2024 and sell it today you would earn a total of 120.00 from holding ASURE SOFTWARE or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ASURE SOFTWARE vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| ASURE SOFTWARE |
| EMBARK EDUCATION LTD |
ASURE SOFTWARE and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and EMBARK EDUCATION
The main advantage of trading using opposite ASURE SOFTWARE and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| ASURE SOFTWARE vs. Singapore Telecommunications Limited | ASURE SOFTWARE vs. Wyndham Hotels Resorts | ASURE SOFTWARE vs. SK TELECOM TDADR | ASURE SOFTWARE vs. Meli Hotels International |
| EMBARK EDUCATION vs. Superior Plus Corp | EMBARK EDUCATION vs. NMI Holdings | EMBARK EDUCATION vs. Origin Agritech | EMBARK EDUCATION vs. SIVERS SEMICONDUCTORS AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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