Correlation Between CVS Health and ASGN

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

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

Diversification Opportunities for CVS Health and ASGN

0.58

Correlation Coefficient

CVS Health  ASGN

Very weak diversification

The 3 months correlation between CVS and ASGN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and CVS 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 CVS Health Corp 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 CVS Health i.e., CVS Health and ASGN go up and down completely randomly.

Pair Corralation between CVS Health and ASGN

Considering the 90-day investment horizon CVS Health Corp is expected to under-perform the ASGN. In addition to that, CVS Health is 1.41 times more volatile than ASGN Inc. It trades about -0.34 of its total potential returns per unit of risk. ASGN Inc is currently generating about -0.06 per unit of volatility. If you would invest  8,574  in ASGN Inc on September 19, 2024 and sell it today you would lose (254.00) from holding ASGN Inc or give up 2.96% of portfolio value over 90 days.

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

CVS Health Corp  vs.  ASGN Inc

CVS Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVS Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 CVS Health and ASGN

The main advantage of trading using opposite CVS Health and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS 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 CVS Health Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.