Correlation Between Asure Software and Marfrig Global

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Can any of the company-specific risk be diversified away by investing in both Asure Software and Marfrig Global 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 Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asure Software and Marfrig Global Foods, you can compare the effects of market volatilities on Asure Software and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asure Software and Marfrig Global.

Diversification Opportunities for Asure Software and Marfrig Global

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Asure and Marfrig is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of Asure Software i.e., Asure Software and Marfrig Global go up and down completely randomly.

Pair Corralation between Asure Software and Marfrig Global

Given the investment horizon of 90 days Asure Software is expected to generate 0.61 times more return on investment than Marfrig Global. However, Asure Software is 1.63 times less risky than Marfrig Global. It trades about 0.39 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about -0.13 per unit of risk. If you would invest  876.00  in Asure Software on November 24, 2023 and sell it today you would earn a total of  140.00  from holding Asure Software or generate 15.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Asure Software  vs.  Marfrig Global Foods

 Performance 
       Timeline  
Asure Software 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.
Marfrig Global Foods 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Marfrig Global Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Marfrig Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Asure Software and Marfrig Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Asure Software and Marfrig Global

The main advantage of trading using opposite Asure Software and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.
The idea behind Asure Software and Marfrig Global Foods 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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