Correlation Between Asure Software and Ainsworth Game

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

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

Diversification Opportunities for Asure Software and Ainsworth Game

0.73

Correlation Coefficient

Asure Software  Ainsworth Game

Poor diversification

The 3 months correlation between Asure and Ainsworth is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology 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 Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Asure Software i.e., Asure Software and Ainsworth Game go up and down completely randomly.

Pair Corralation between Asure Software and Ainsworth Game

Given the investment horizon of 90 days Asure Software is expected to generate 1.87 times more return on investment than Ainsworth Game. However, Asure Software is 1.87 times more volatile than Ainsworth Game Technology. It trades about -0.07 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.14 per unit of risk. If you would invest  751.00  in Asure Software on February 5, 2024 and sell it today you would lose (47.00) from holding Asure Software or give up 6.26% of portfolio value over 90 days.

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

Asure Software  vs.  Ainsworth Game Technology

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ainsworth Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Asure Software and Ainsworth Game

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

The idea behind Asure Software and Ainsworth Game Technology 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.