Correlation Between Marine Products and Asure Software

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

Diversification Opportunities for Marine Products and Asure Software

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Marine and Asure is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products Corp and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Marine Products 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 Marine Products Corp are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Marine Products i.e., Marine Products and Asure Software go up and down completely randomly.

Pair Corralation between Marine Products and Asure Software

Considering the 90-day investment horizon Marine Products is expected to generate 1.11 times less return on investment than Asure Software. But when comparing it to its historical volatility, Marine Products Corp is 1.07 times less risky than Asure Software. It trades about 0.31 of its potential returns per unit of risk. Asure Software is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  660.00  in Asure Software on September 1, 2022 and sell it today you would earn a total of  133.00  from holding Asure Software or generate 20.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Marine Products Corp  vs.  Asure Software

 Performance (%) 
       Timeline  
Marine Products Corp 
Marine Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marine Products Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Marine Products showed solid returns over the last few months and may actually be approaching a breakup point.

Marine Price Channel

Asure Software 
Asure Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Asure Price Channel

Marine Products and Asure Software Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marine Products and Asure Software

The main advantage of trading using opposite Marine Products and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.
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The idea behind Marine Products Corp and Asure Software 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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Check out your portfolio center. 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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