Correlation Between ASGN and IBEX

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

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

Diversification Opportunities for ASGN and IBEX

0.0

Correlation Coefficient

ASGN  IBEX

Pay attention - limited upside

The 3 months correlation between ASGN and IBEX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX 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 IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of ASGN i.e., ASGN and IBEX go up and down completely randomly.

Pair Corralation between ASGN and IBEX

Given the investment horizon of 90 days ASGN Inc is expected to under-perform the IBEX. But the stock apears to be less risky and, when comparing its historical volatility, ASGN Inc is 1.36 times less risky than IBEX. The stock trades about 0.0 of its potential returns per unit of risk. The IBEX is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,723  in IBEX on September 5, 2024 and sell it today you would earn a total of  292.00  from holding IBEX or generate 16.95% return on investment over 90 days.

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

ASGN Inc  vs.  IBEX

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 recent stock price disarray, may contribute to short-term losses for the investors.

IBEX

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, IBEX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASGN and IBEX

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

The idea behind ASGN Inc and IBEX 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.