Correlation Between ASGN and GDS Holdings
Can any of the company-specific risk be diversified away by investing in both ASGN and GDS Holdings 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 GDS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASGN Inc and GDS Holdings, you can compare the effects of market volatilities on ASGN and GDS Holdings 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 GDS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASGN and GDS Holdings.
Diversification Opportunities for ASGN and GDS Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASGN and GDS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and GDS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDS Holdings 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 GDS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDS Holdings has no effect on the direction of ASGN i.e., ASGN and GDS Holdings go up and down completely randomly.
Pair Corralation between ASGN and GDS Holdings
Given the investment horizon of 90 days ASGN is expected to generate 3.38 times less return on investment than GDS Holdings. But when comparing it to its historical volatility, ASGN Inc is 2.55 times less risky than GDS Holdings. It trades about 0.02 of its potential returns per unit of risk. GDS Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,755 in GDS Holdings on August 28, 2024 and sell it today you would earn a total of 116.00 from holding GDS Holdings or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASGN Inc vs. GDS Holdings
Performance |
| Timeline |
| ASGN Inc |
| GDS Holdings |
ASGN and GDS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASGN and GDS Holdings
The main advantage of trading using opposite ASGN and GDS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN position performs unexpectedly, GDS Holdings 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 GDS Holdings will offset losses from the drop in GDS Holdings' long position.The idea behind ASGN Inc and GDS Holdings 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.| GDS Holdings vs. Oneconnect Financial Technology | GDS Holdings vs. Global Business Travel | GDS Holdings vs. Alight Inc | GDS Holdings vs. CS Disco LLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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