Correlation Between ASGN and N Able

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

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

Diversification Opportunities for ASGN and N Able

0.82

Correlation Coefficient

ASGN  N Able

Very poor diversification

The 3 months correlation between ASGN and NABL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and N Able Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Able Inc 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 N Able. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Able Inc has no effect on the direction of ASGN i.e., ASGN and N Able go up and down completely randomly.

Pair Corralation between ASGN and N Able

Given the investment horizon of 90 days ASGN Inc is expected to generate 1.25 times more return on investment than N Able. However, ASGN is 1.25 times more volatile than N Able Inc. It trades about -0.09 of its potential returns per unit of risk. N Able Inc is currently generating about -0.31 per unit of risk. If you would invest  9,913  in ASGN Inc on October 16, 2024 and sell it today you would lose (1,160) from holding ASGN Inc or give up 11.7% 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.  N Able Inc

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 weak 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.

N Able Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days N Able Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ASGN and N Able

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

The idea behind ASGN Inc and N Able Inc 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.