Correlation Between Asure Software and ESSEX

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

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

Diversification Opportunities for Asure Software and ESSEX

-0.14

Correlation Coefficient

Asure Software  ESSEX

Good diversification

The 3 months correlation between Asure and ESSEX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and ESSEX PORTFOLIO L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSEX PORTFOLIO L 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 ESSEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSEX PORTFOLIO L has no effect on the direction of Asure Software i.e., Asure Software and ESSEX go up and down completely randomly.

Pair Corralation between Asure Software and ESSEX

Given the investment horizon of 90 days Asure Software is expected to generate 16.35 times more return on investment than ESSEX. However, Asure Software is 16.35 times more volatile than ESSEX PORTFOLIO L. It trades about 0.01 of its potential returns per unit of risk. ESSEX PORTFOLIO L is currently generating about -0.13 per unit of risk. If you would invest  918.00  in Asure Software on September 26, 2024 and sell it today you would lose (8.00) from holding Asure Software or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Asure Software  vs.  ESSEX PORTFOLIO L

Asure Software

Risk-Adjusted Performance

0 of 100

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 current stock price agitation, may contribute to short-term losses for the retail investors.

ESSEX PORTFOLIO L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESSEX PORTFOLIO L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ESSEX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Asure Software and ESSEX

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

The idea behind Asure Software and ESSEX PORTFOLIO L 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..