Correlation Between HealthEquity and ASGN

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

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

Diversification Opportunities for HealthEquity and ASGN

-0.36

Correlation Coefficient

HealthEquity  ASGN

Very good diversification

The 3 months correlation between HealthEquity and ASGN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and HealthEquity 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 HealthEquity 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 HealthEquity i.e., HealthEquity and ASGN go up and down completely randomly.

Pair Corralation between HealthEquity and ASGN

Considering the 90-day investment horizon HealthEquity is expected to generate 1.09 times more return on investment than ASGN. However, HealthEquity is 1.09 times more volatile than ASGN Inc. It trades about 0.15 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.04 per unit of risk. If you would invest  7,825  in HealthEquity on September 16, 2024 and sell it today you would earn a total of  1,737  from holding HealthEquity or generate 22.2% return on investment over 90 days.

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

HealthEquity  vs.  ASGN Inc

HealthEquity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, HealthEquity 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 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 HealthEquity and ASGN

The main advantage of trading using opposite HealthEquity and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthEquity 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 HealthEquity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.