Correlation Between VTEX and Asure Software

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

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

Diversification Opportunities for VTEX and Asure Software

-0.36

Correlation Coefficient

VTEX  Asure Software

Very good diversification

The 3 months correlation between VTEX and Asure is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VTEX and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and VTEX 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 VTEX are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of VTEX i.e., VTEX and Asure Software go up and down completely randomly.

Pair Corralation between VTEX and Asure Software

Given the investment horizon of 90 days VTEX is expected to generate 0.89 times more return on investment than Asure Software. However, VTEX is 1.12 times less risky than Asure Software. It trades about 0.04 of its potential returns per unit of risk. Asure Software is currently generating about 0.01 per unit of risk. If you would invest  393.00  in VTEX on September 22, 2024 and sell it today you would earn a total of  175.00  from holding VTEX or generate 44.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

VTEX  vs.  Asure Software

VTEX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VTEX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Asure Software

Risk-Adjusted Performance

0 of 100

Very 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.

Pair Trading with VTEX and Asure Software

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

The idea behind VTEX and Asure Software 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.