Correlation Between Barnes and ASGN

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

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

Diversification Opportunities for Barnes and ASGN

-0.75

Correlation Coefficient

Barnes  ASGN

Pay attention - limited upside

The 3 months correlation between Barnes and ASGN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Barnes 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 Barnes Group are associated (or correlated) with ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Barnes i.e., Barnes and ASGN go up and down completely randomly.

Pair Corralation between Barnes and ASGN

Taking into account the 90-day investment horizon Barnes Group is expected to generate 1.28 times more return on investment than ASGN. However, Barnes is 1.28 times more volatile than ASGN Inc. It trades about 0.02 of its potential returns per unit of risk. ASGN Inc is currently generating about 0.01 per unit of risk. If you would invest  4,394  in Barnes Group on October 23, 2024 and sell it today you would earn a total of  346.00  from holding Barnes Group or generate 7.87% return on investment over 90 days.

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

Barnes Group  vs.  ASGN Inc

Barnes Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barnes Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Barnes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Barnes and ASGN

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

The idea behind Barnes Group and ASGN 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.