Correlation Between ASGN and Aurora Innovation
Can any of the company-specific risk be diversified away by investing in both ASGN and Aurora Innovation 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 ASGN and Aurora Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASGN Inc and Aurora Innovation, you can compare the effects of market volatilities on ASGN and Aurora Innovation 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 ASGN with a short position of Aurora Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASGN and Aurora Innovation.
Diversification Opportunities for ASGN and Aurora Innovation
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASGN and Aurora is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Aurora Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Innovation and ASGN 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 ASGN Inc are associated (or correlated) with Aurora Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Innovation has no effect on the direction of ASGN i.e., ASGN and Aurora Innovation go up and down completely randomly.
Pair Corralation between ASGN and Aurora Innovation
Given the investment horizon of 90 days ASGN Inc is expected to under-perform the Aurora Innovation. But the stock apears to be less risky and, when comparing its historical volatility, ASGN Inc is 2.89 times less risky than Aurora Innovation. The stock trades about -0.03 of its potential returns per unit of risk. The Aurora Innovation is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Aurora Innovation on August 28, 2024 and sell it today you would lose (40.00) from holding Aurora Innovation or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASGN Inc vs. Aurora Innovation
Performance |
| Timeline |
| ASGN Inc |
| Aurora Innovation |
ASGN and Aurora Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASGN and Aurora Innovation
The main advantage of trading using opposite ASGN and Aurora Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN position performs unexpectedly, Aurora Innovation 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 Aurora Innovation will offset losses from the drop in Aurora Innovation's long position.The idea behind ASGN Inc and Aurora Innovation 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.| Aurora Innovation vs. FiscalNote Holdings | Aurora Innovation vs. Innodata | Aurora Innovation vs. International Business Machines | Aurora Innovation vs. BigBearai Holdings |
Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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