Correlation Between Clearwater Analytics and ASGN

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

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

Diversification Opportunities for Clearwater Analytics and ASGN

-0.3

Correlation Coefficient

Clearwater Analytics  ASGN

Very good diversification

The 3 months correlation between Clearwater and ASGN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Clearwater Analytics 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 Clearwater Analytics Holdings 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 Clearwater Analytics i.e., Clearwater Analytics and ASGN go up and down completely randomly.

Pair Corralation between Clearwater Analytics and ASGN

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to under-perform the ASGN. In addition to that, Clearwater Analytics is 1.12 times more volatile than ASGN Inc. It trades about -0.07 of its total potential returns per unit of risk. ASGN Inc is currently generating about 0.01 per unit of volatility. If you would invest  8,789  in ASGN Inc on September 16, 2024 and sell it today you would earn a total of  13.00  from holding ASGN Inc or generate 0.15% return on investment over 90 days.

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

Clearwater Analytics Holdings  vs.  ASGN Inc

Clearwater Analytics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Clearwater Analytics displayed 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 very healthy technical and fundamental indicators, ASGN is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Clearwater Analytics and ASGN

The main advantage of trading using opposite Clearwater Analytics and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics 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 Clearwater Analytics Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.