Correlation Between ASGN and Laboratory

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

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

Diversification Opportunities for ASGN and Laboratory

-0.29

Correlation Coefficient

ASGN  Laboratory

Very good diversification

The 3 months correlation between ASGN and Laboratory is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Laboratory of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratory and ASGN 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 ASGN Inc are associated (or correlated) with Laboratory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratory has no effect on the direction of ASGN i.e., ASGN and Laboratory go up and down completely randomly.

Pair Corralation between ASGN and Laboratory

Given the investment horizon of 90 days ASGN is expected to generate 1.22 times less return on investment than Laboratory. In addition to that, ASGN is 1.46 times more volatile than Laboratory of. It trades about 0.02 of its total potential returns per unit of risk. Laboratory of is currently generating about 0.03 per unit of volatility. If you would invest  19,388  in Laboratory of on September 13, 2024 and sell it today you would earn a total of  3,801  from holding Laboratory of or generate 19.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

ASGN Inc  vs.  Laboratory of

ASGN Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASGN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, ASGN is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Laboratory

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Laboratory is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ASGN and Laboratory

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

The idea behind ASGN Inc and Laboratory of 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..