Correlation Between ASURE SOFTWARE and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both ASURE SOFTWARE and UNITED RENTALS 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 UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASURE SOFTWARE and UNITED RENTALS, you can compare the effects of market volatilities on ASURE SOFTWARE and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASURE SOFTWARE and UNITED RENTALS.
Diversification Opportunities for ASURE SOFTWARE and UNITED RENTALS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASURE and UNITED is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and UNITED RENTALS go up and down completely randomly.
Pair Corralation between ASURE SOFTWARE and UNITED RENTALS
Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 1.01 times less return on investment than UNITED RENTALS. In addition to that, ASURE SOFTWARE is 1.47 times more volatile than UNITED RENTALS. It trades about 0.11 of its total potential returns per unit of risk. UNITED RENTALS is currently generating about 0.16 per unit of volatility. If you would invest 66,487 in UNITED RENTALS on September 2, 2024 and sell it today you would earn a total of 14,233 from holding UNITED RENTALS or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASURE SOFTWARE vs. UNITED RENTALS
Performance |
| Timeline |
| ASURE SOFTWARE |
| UNITED RENTALS |
ASURE SOFTWARE and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASURE SOFTWARE and UNITED RENTALS
The main advantage of trading using opposite ASURE SOFTWARE and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASURE SOFTWARE position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS'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 |
| UNITED RENTALS vs. Harmony Gold Mining | UNITED RENTALS vs. GREENX METALS LTD | UNITED RENTALS vs. INDOFOOD AGRI RES | UNITED RENTALS vs. Lion One Metals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |