Correlation Between Asure Software and Meridian Bancorp

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

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

Diversification Opportunities for Asure Software and Meridian Bancorp

0.0

Correlation Coefficient

Asure Software  Meridian Bancorp

Pay attention - limited upside

The 3 months correlation between Asure and Meridian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Meridian Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bancorp 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 Meridian Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bancorp has no effect on the direction of Asure Software i.e., Asure Software and Meridian Bancorp go up and down completely randomly.

Pair Corralation between Asure Software and Meridian Bancorp

If you would invest (100.00) in Meridian Bancorp on February 5, 2024 and sell it today you would earn a total of  100.00  from holding Meridian Bancorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Asure Software  vs.  Meridian Bancorp

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.

Meridian Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meridian Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Meridian Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Asure Software and Meridian Bancorp

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

The idea behind Asure Software and Meridian Bancorp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.