Correlation Between Asure Software and Acco Brands

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

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

Diversification Opportunities for Asure Software and Acco Brands

0.82

Correlation Coefficient

Asure Software  Acco Brands

Very poor diversification

The 3 months correlation between Asure and Acco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands 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 Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Asure Software i.e., Asure Software and Acco Brands go up and down completely randomly.

Pair Corralation between Asure Software and Acco Brands

Given the investment horizon of 90 days Asure Software is expected to under-perform the Acco Brands. In addition to that, Asure Software is 1.4 times more volatile than Acco Brands. It trades about -0.23 of its total potential returns per unit of risk. Acco Brands is currently generating about -0.16 per unit of volatility. If you would invest  538.00  in Acco Brands on February 2, 2024 and sell it today you would lose (62.00) from holding Acco Brands or give up 11.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.67%
Values	Daily Returns

Asure Software  vs.  Acco Brands

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 uncertain 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.

Acco Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Asure Software and Acco Brands

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

The idea behind Asure Software and Acco Brands 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.