Correlation Between ASURE SOFTWARE and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and MAGNA INTL 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 MAGNA INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and MAGNA INTL, you can compare the effects of market volatilities on ASURE SOFTWARE and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and MAGNA INTL.
Diversification Opportunities for ASURE SOFTWARE and MAGNA INTL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASURE and MAGNA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and MAGNA INTL go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and MAGNA INTL
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 1.59 times more return on investment than MAGNA INTL. However, ASURE SOFTWARE is 1.59 times more volatile than MAGNA INTL. It trades about 0.1 of its potential returns per unit of risk. MAGNA INTL is currently generating about 0.03 per unit of risk. If you would invest 690.00 in ASURE SOFTWARE on September 1, 2024 and sell it today you would earn a total of 230.00 from holding ASURE SOFTWARE or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
ASURE SOFTWARE vs. MAGNA INTL
Performance |
| Timeline |
| ASURE SOFTWARE |
| MAGNA INTL |
ASURE SOFTWARE and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and MAGNA INTL
The main advantage of trading using opposite ASURE SOFTWARE and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL'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 |
| MAGNA INTL vs. Arrow Electronics | MAGNA INTL vs. Citic Telecom International | MAGNA INTL vs. Nucletron Electronic Aktiengesellschaft | MAGNA INTL vs. ELECTRONIC ARTS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |