Correlation Between Asure Software and Amexdrug

Can any of the company-specific risk be diversified away by investing in both Asure Software and Amexdrug 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 Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asure Software and Amexdrug, you can compare the effects of market volatilities on Asure Software and Amexdrug 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 Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and Amexdrug.

Diversification Opportunities for Asure Software and Amexdrug

0.0

Correlation Coefficient

Asure Software  Amexdrug

Pay attention - limited upside

The 3 months correlation between Asure and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug 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 Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Asure Software i.e., Asure Software and Amexdrug go up and down completely randomly.

Pair Corralation between Asure Software and Amexdrug

Given the investment horizon of 90 days Asure Software is expected to generate 24.4 times less return on investment than Amexdrug. But when comparing it to its historical volatility, Asure Software is 10.31 times less risky than Amexdrug. It trades about 0.02 of its potential returns per unit of risk. Amexdrug is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Amexdrug on September 19, 2024 and sell it today you would lose (16.80) from holding Amexdrug or give up 98.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Asure Software  vs.  Amexdrug

Asure Software

Risk-Adjusted Performance

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Weak

Over the last 90 days Asure Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Asure Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Amexdrug

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Asure Software and Amexdrug

The main advantage of trading using opposite Asure Software and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.

The idea behind Asure Software and Amexdrug pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.