Correlation Between ASGN and Maximus
Can any of the company-specific risk be diversified away by investing in both ASGN and Maximus 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 Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASGN Inc and Maximus, you can compare the effects of market volatilities on ASGN and Maximus 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 Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASGN and Maximus.
Diversification Opportunities for ASGN and Maximus
Poor diversification
The 3 months correlation between ASGN and Maximus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus 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 Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of ASGN i.e., ASGN and Maximus go up and down completely randomly.
Pair Corralation between ASGN and Maximus
Given the investment horizon of 90 days ASGN Inc is expected to generate 1.14 times more return on investment than Maximus. However, ASGN is 1.14 times more volatile than Maximus. It trades about 0.02 of its potential returns per unit of risk. Maximus is currently generating about -0.28 per unit of risk. If you would invest 9,143 in ASGN Inc on September 3, 2024 and sell it today you would earn a total of 12.00 from holding ASGN Inc or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASGN Inc vs. Maximus
Performance |
| Timeline |
| ASGN Inc |
| Maximus |
ASGN and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASGN and Maximus
The main advantage of trading using opposite ASGN and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.The idea behind ASGN Inc and Maximus 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.| Maximus vs. Network 1 Technologies | Maximus vs. First Advantage Corp | Maximus vs. BrightView Holdings | Maximus vs. Civeo Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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