Correlation Between ASGN and High Wire

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

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

Diversification Opportunities for ASGN and High Wire

0.08

Correlation Coefficient

ASGN  High Wire

Significant diversification

The 3 months correlation between ASGN and High is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and High Wire Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Wire Networks 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 High Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Wire Networks has no effect on the direction of ASGN i.e., ASGN and High Wire go up and down completely randomly.

Pair Corralation between ASGN and High Wire

Given the investment horizon of 90 days ASGN Inc is expected to under-perform the High Wire. But the stock apears to be less risky and, when comparing its historical volatility, ASGN Inc is 10.92 times less risky than High Wire. The stock trades about -0.18 of its potential returns per unit of risk. The High Wire Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.70  in High Wire Networks on October 9, 2024 and sell it today you would lose (0.20) from holding High Wire Networks or give up 5.41% of portfolio value over 90 days.

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

ASGN Inc  vs.  High Wire Networks

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 latest uncertain performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

High Wire Networks

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in High Wire Networks are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, High Wire demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASGN and High Wire

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

The idea behind ASGN Inc and High Wire Networks 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.