Correlation Between ASGN and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both ASGN and Cardinal Health 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 Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASGN Inc and Cardinal Health, you can compare the effects of market volatilities on ASGN and Cardinal Health 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 Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASGN and Cardinal Health.
Diversification Opportunities for ASGN and Cardinal Health
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASGN and Cardinal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of ASGN i.e., ASGN and Cardinal Health go up and down completely randomly.
Pair Corralation between ASGN and Cardinal Health
Given the investment horizon of 90 days ASGN Inc is expected to under-perform the Cardinal Health. In addition to that, ASGN is 1.52 times more volatile than Cardinal Health. It trades about -0.09 of its total potential returns per unit of risk. Cardinal Health is currently generating about -0.09 per unit of volatility. If you would invest 12,129 in Cardinal Health on September 15, 2024 and sell it today you would lose (319.00) from holding Cardinal Health or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASGN Inc vs. Cardinal Health
Performance |
| Timeline |
| ASGN Inc |
| Cardinal Health |
ASGN and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASGN and Cardinal Health
The main advantage of trading using opposite ASGN and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.The idea behind ASGN Inc and Cardinal Health 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.| Cardinal Health vs. ASGN Inc | Cardinal Health vs. Kforce Inc | Cardinal Health vs. Kelly Services A | Cardinal Health vs. AMN Healthcare Services |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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