Correlation Between ATRenew and Asure Software

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

By analyzing existing cross correlation between ATRenew Inc DRC and Asure Software, you can compare the effects of market volatilities on ATRenew 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 ATRenew with a short position of Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRenew and Asure Software.

Diversification Opportunities for ATRenew and Asure Software

-0.83

Correlation Coefficient

ATRenew  Asure Software

Pay attention - limited upside

The 3 months correlation between ATRenew and Asure is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and ATRenew 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 ATRenew Inc DRC 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 ATRenew i.e., ATRenew and Asure Software go up and down completely randomly.

Pair Corralation between ATRenew and Asure Software

Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 2.62 times more return on investment than Asure Software. However, ATRenew is 2.62 times more volatile than Asure Software. It trades about 0.22 of its potential returns per unit of risk. Asure Software is currently generating about -0.19 per unit of risk. If you would invest  117.00  in ATRenew Inc DRC on January 29, 2024 and sell it today you would earn a total of  81.00  from holding ATRenew Inc DRC or generate 69.23% return on investment over 90 days.

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

ATRenew Inc DRC  vs.  Asure Software

ATRenew Inc DRC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ATRenew and Asure Software

The main advantage of trading using opposite ATRenew and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew 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.

The idea behind ATRenew Inc DRC 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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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.