Correlation Between Insperity and ASGN Incorporated

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

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

Diversification Opportunities for Insperity and ASGN Incorporated

0.26

Correlation Coefficient

Insperity  ASGN Incorporated

Modest diversification

The 3 months correlation between Insperity and ASGN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Insperity and ASGN Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Incorporated and Insperity 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 Insperity are associated (or correlated) with ASGN Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Incorporated has no effect on the direction of Insperity i.e., Insperity and ASGN Incorporated go up and down completely randomly.

Pair Corralation between Insperity and ASGN Incorporated

Assuming the 90 days horizon Insperity is expected to generate 1.91 times more return on investment than ASGN Incorporated. However, Insperity is 1.91 times more volatile than ASGN Incorporated. It trades about 0.01 of its potential returns per unit of risk. ASGN Incorporated is currently generating about -0.25 per unit of risk. If you would invest  7,295  in Insperity on September 26, 2024 and sell it today you would earn a total of  5.00  from holding Insperity or generate 0.07% return on investment over 90 days.

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

Insperity  vs.  ASGN Incorporated

Insperity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Insperity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Insperity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ASGN Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASGN Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ASGN Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Insperity and ASGN Incorporated

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

The idea behind Insperity and ASGN Incorporated 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.