Correlation Between Adapthealth Corp and ASGN

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

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

Diversification Opportunities for Adapthealth Corp and ASGN

0.13

Correlation Coefficient

Adapthealth Corp  ASGN

Average diversification

The 3 months correlation between Adapthealth and ASGN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Adapthealth Corp and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Adapthealth Corp 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 Adapthealth Corp are associated (or correlated) with ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Adapthealth Corp i.e., Adapthealth Corp and ASGN go up and down completely randomly.

Pair Corralation between Adapthealth Corp and ASGN

Given the investment horizon of 90 days Adapthealth Corp is expected to generate 1.85 times more return on investment than ASGN. However, Adapthealth Corp is 1.85 times more volatile than ASGN Inc. It trades about 0.06 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.19 per unit of risk. If you would invest  953.00  in Adapthealth Corp on December 27, 2024 and sell it today you would earn a total of  95.00  from holding Adapthealth Corp or generate 9.97% return on investment over 90 days.

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

Adapthealth Corp  vs.  ASGN Inc

Adapthealth Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adapthealth Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Adapthealth Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

ASGN Inc

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Adapthealth Corp and ASGN

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

The idea behind Adapthealth Corp and ASGN Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..