Correlation Between ASURE SOFTWARE and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on ASURE SOFTWARE and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and KINGBOARD CHEMICAL.
Diversification Opportunities for ASURE SOFTWARE and KINGBOARD CHEMICAL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASURE and KINGBOARD is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and KINGBOARD CHEMICAL
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 3.19 times less return on investment than KINGBOARD CHEMICAL. But when comparing it to its historical volatility, ASURE SOFTWARE is 1.15 times less risky than KINGBOARD CHEMICAL. It trades about 0.01 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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 |
ASURE SOFTWARE vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| ASURE SOFTWARE |
| KINGBOARD CHEMICAL |
ASURE SOFTWARE and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and KINGBOARD CHEMICAL
The main advantage of trading using opposite ASURE SOFTWARE and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| ASURE SOFTWARE vs. PennyMac Mortgage Investment | ASURE SOFTWARE vs. Autohome ADR | ASURE SOFTWARE vs. bet at home AG | ASURE SOFTWARE vs. NURAN WIRELESS INC |
| KINGBOARD CHEMICAL vs. TSOGO SUN GAMING | KINGBOARD CHEMICAL vs. NEWELL RUBBERMAID | KINGBOARD CHEMICAL vs. Boyd Gaming | KINGBOARD CHEMICAL vs. Martin Marietta Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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