Correlation Between Asure Software and SNDL

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

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

Diversification Opportunities for Asure Software and SNDL

0.07

Correlation Coefficient

Asure Software  SNDL

Significant diversification

The 3 months correlation between Asure and SNDL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Asure Software i.e., Asure Software and SNDL go up and down completely randomly.

Pair Corralation between Asure Software and SNDL

Given the investment horizon of 90 days Asure Software is expected to generate 2.04 times less return on investment than SNDL. But when comparing it to its historical volatility, Asure Software is 1.54 times less risky than SNDL. It trades about 0.03 of its potential returns per unit of risk. SNDL Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  144.00  in SNDL Inc on September 14, 2024 and sell it today you would earn a total of  34.00  from holding SNDL Inc or generate 23.61% return on investment over 90 days.

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

Asure Software  vs.  SNDL Inc

Asure Software

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Asure Software may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asure Software and SNDL

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

The idea behind Asure Software and SNDL Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.