Correlation Between ASURE SOFTWARE and NEWELL RUBBERMAID

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

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

Diversification Opportunities for ASURE SOFTWARE and NEWELL RUBBERMAID

0.63

Correlation Coefficient

ASURE SOFTWARE  NEWELL RUBBERMAID

Poor diversification

The 3 months correlation between ASURE and NEWELL is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ASURE SOFTWARE and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of ASURE SOFTWARE i.e., ASURE SOFTWARE and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between ASURE SOFTWARE and NEWELL RUBBERMAID

Assuming the 90 days trading horizon ASURE SOFTWARE is expected to generate 4.57 times less return on investment than NEWELL RUBBERMAID. But when comparing it to its historical volatility, ASURE SOFTWARE is 1.37 times less risky than NEWELL RUBBERMAID. It trades about 0.05 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  652.00  in NEWELL RUBBERMAID on September 23, 2024 and sell it today you would earn a total of  295.00  from holding NEWELL RUBBERMAID or generate 45.25% 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.  NEWELL RUBBERMAID

ASURE SOFTWARE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASURE SOFTWARE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ASURE SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NEWELL RUBBERMAID

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEWELL RUBBERMAID are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, NEWELL RUBBERMAID unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASURE SOFTWARE and NEWELL RUBBERMAID

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

The idea behind ASURE SOFTWARE and NEWELL RUBBERMAID 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.