Correlation Between ASGN and Leidos Holdings

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

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

Diversification Opportunities for ASGN and Leidos Holdings

0.83

Correlation Coefficient

ASGN  Leidos Holdings

Very poor diversification

The 3 months correlation between ASGN and Leidos is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos Holdings 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 Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of ASGN i.e., ASGN and Leidos Holdings go up and down completely randomly.

Pair Corralation between ASGN and Leidos Holdings

Given the investment horizon of 90 days ASGN Inc is expected to under-perform the Leidos Holdings. In addition to that, ASGN is 1.11 times more volatile than Leidos Holdings. It trades about -0.19 of its total potential returns per unit of risk. Leidos Holdings is currently generating about -0.03 per unit of volatility. If you would invest  14,274  in Leidos Holdings on December 28, 2024 and sell it today you would lose (640.00) from holding Leidos Holdings or give up 4.48% of portfolio value over 90 days.

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

ASGN Inc  vs.  Leidos Holdings

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.

Leidos Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leidos Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Leidos Holdings 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 Leidos Holdings

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

The idea behind ASGN Inc and Leidos Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.