Correlation Between ASGN and Conduent

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

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

Diversification Opportunities for ASGN and Conduent

0.66

Correlation Coefficient

ASGN  Conduent

Poor diversification

The 3 months correlation between ASGN and Conduent is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Conduent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduent 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 Conduent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduent has no effect on the direction of ASGN i.e., ASGN and Conduent go up and down completely randomly.

Pair Corralation between ASGN and Conduent

Given the investment horizon of 90 days ASGN is expected to generate 33.4 times less return on investment than Conduent. But when comparing it to its historical volatility, ASGN Inc is 1.35 times less risky than Conduent. It trades about 0.0 of its potential returns per unit of risk. Conduent is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  374.00  in Conduent on September 3, 2024 and sell it today you would lose (1.00) from holding Conduent or give up 0.27% of portfolio value over 90 days.

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

ASGN Inc  vs.  Conduent

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.

Conduent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conduent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Conduent is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ASGN and Conduent

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

The idea behind ASGN Inc and Conduent 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.