Correlation Between Asure Software and Fortress Transp

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

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

Diversification Opportunities for Asure Software and Fortress Transp

-0.85

Correlation Coefficient

Asure Software  Fortress Transp

Pay attention - limited upside

The 3 months correlation between Asure and Fortress is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of Asure Software i.e., Asure Software and Fortress Transp go up and down completely randomly.

Pair Corralation between Asure Software and Fortress Transp

Given the investment horizon of 90 days Asure Software is expected to under-perform the Fortress Transp. In addition to that, Asure Software is 1.44 times more volatile than Fortress Transp Infra. It trades about -0.12 of its total potential returns per unit of risk. Fortress Transp Infra is currently generating about 0.3 per unit of volatility. If you would invest  5,420  in Fortress Transp Infra on February 22, 2024 and sell it today you would earn a total of  2,769  from holding Fortress Transp Infra or generate 51.09% return on investment over 90 days.

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

Asure Software  vs.  Fortress Transp Infra

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.

Fortress Transp Infra

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Fortress Transp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asure Software and Fortress Transp

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

The idea behind Asure Software and Fortress Transp Infra 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.