Correlation Between Pick N and ASGN Incorporated

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

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

Diversification Opportunities for Pick N and ASGN Incorporated

-0.29

Correlation Coefficient

Pick N  ASGN Incorporated

Very good diversification

The 3 months correlation between Pick and ASGN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pick n Pay and ASGN Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Incorporated and Pick N 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 Pick n Pay are associated (or correlated) with ASGN Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Incorporated has no effect on the direction of Pick N i.e., Pick N and ASGN Incorporated go up and down completely randomly.

Pair Corralation between Pick N and ASGN Incorporated

Assuming the 90 days horizon Pick n Pay is expected to generate 16.4 times more return on investment than ASGN Incorporated. However, Pick N is 16.4 times more volatile than ASGN Incorporated. It trades about 0.04 of its potential returns per unit of risk. ASGN Incorporated is currently generating about 0.01 per unit of risk. If you would invest  312.00  in Pick n Pay on September 26, 2024 and sell it today you would lose (155.00) from holding Pick n Pay or give up 49.68% of portfolio value over 90 days.

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

Pick n Pay  vs.  ASGN Incorporated

Pick n Pay

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pick n Pay are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pick N reported solid returns over the last few months and may actually be approaching a breakup point.

ASGN Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASGN Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ASGN Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pick N and ASGN Incorporated

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

The idea behind Pick n Pay and ASGN Incorporated 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.