Correlation Between Formula Systems and ASGN
Can any of the company-specific risk be diversified away by investing in both Formula Systems and ASGN 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 Formula Systems and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formula Systems 1985 and ASGN Inc, you can compare the effects of market volatilities on Formula Systems and ASGN 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 Formula Systems with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Systems and ASGN.
Diversification Opportunities for Formula Systems and ASGN
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Formula and ASGN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Formula Systems 1985 and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Formula Systems 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 Formula Systems 1985 are associated (or correlated) with ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Formula Systems i.e., Formula Systems and ASGN go up and down completely randomly.
Pair Corralation between Formula Systems and ASGN
Assuming the 90 days horizon Formula Systems 1985 is expected to generate 0.93 times more return on investment than ASGN. However, Formula Systems 1985 is 1.07 times less risky than ASGN. It trades about -0.06 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.07 per unit of risk. If you would invest 8,356 in Formula Systems 1985 on August 27, 2024 and sell it today you would lose (336.00) from holding Formula Systems 1985 or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formula Systems 1985 vs. ASGN Inc
Performance |
| Timeline |
| Formula Systems 1985 |
| ASGN Inc |
Formula Systems and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formula Systems and ASGN
The main advantage of trading using opposite Formula Systems and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formula Systems position performs unexpectedly, ASGN 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 will offset losses from the drop in ASGN's long position.| Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Information Services Group | Formula Systems vs. The Hackett Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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