Correlation Between ASURE SOFTWARE and GBS Software
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and GBS 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 ASURE SOFTWARE and GBS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and GBS Software AG, you can compare the effects of market volatilities on ASURE SOFTWARE and GBS 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 ASURE SOFTWARE with a short position of GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and GBS Software.
Diversification Opportunities for ASURE SOFTWARE and GBS Software
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASURE and GBS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and GBS Software go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and GBS Software
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 1.36 times more return on investment than GBS Software. However, ASURE SOFTWARE is 1.36 times more volatile than GBS Software AG. It trades about 0.06 of its potential returns per unit of risk. GBS Software AG is currently generating about -0.01 per unit of risk. If you would invest 770.00 in ASURE SOFTWARE on October 16, 2024 and sell it today you would earn a total of 320.00 from holding ASURE SOFTWARE or generate 41.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASURE SOFTWARE vs. GBS Software AG
Performance |
| Timeline |
| ASURE SOFTWARE |
| GBS Software AG |
ASURE SOFTWARE and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and GBS Software
The main advantage of trading using opposite ASURE SOFTWARE and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, GBS 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 GBS Software will offset losses from the drop in GBS Software's long position.| ASURE SOFTWARE vs. Thai Beverage Public | ASURE SOFTWARE vs. JAPAN AIRLINES | ASURE SOFTWARE vs. PLANT VEDA FOODS | ASURE SOFTWARE vs. American Airlines Group |
| GBS Software vs. SEI INVESTMENTS | GBS Software vs. Perseus Mining Limited | GBS Software vs. Zijin Mining Group | GBS Software vs. GALENA MINING LTD |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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