Correlation Between Clover Health and ASGN

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

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

Diversification Opportunities for Clover Health and ASGN

0.44

Correlation Coefficient

Clover Health  ASGN

Very weak diversification

The 3 months correlation between Clover and ASGN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Clover Health 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 Clover Health Investments 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 Clover Health i.e., Clover Health and ASGN go up and down completely randomly.

Pair Corralation between Clover Health and ASGN

Given the investment horizon of 90 days Clover Health Investments is expected to generate 2.58 times more return on investment than ASGN. However, Clover Health is 2.58 times more volatile than ASGN Inc. It trades about 0.16 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.01 per unit of risk. If you would invest  127.00  in Clover Health Investments on September 22, 2024 and sell it today you would earn a total of  196.00  from holding Clover Health Investments or generate 154.33% return on investment over 90 days.

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

Clover Health Investments  vs.  ASGN Inc

Clover Health Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clover Health Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Clover Health showed solid returns over the last few months and may actually be approaching a breakup point.

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 inconsistent 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.

Pair Trading with Clover Health and ASGN

The main advantage of trading using opposite Clover Health and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health 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 Clover Health Investments 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.