Correlation Between Science Applications and ASGN
Can any of the company-specific risk be diversified away by investing in both Science Applications 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 Science Applications and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Applications International and ASGN Inc, you can compare the effects of market volatilities on Science Applications 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 Science Applications with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and ASGN.
Diversification Opportunities for Science Applications and ASGN
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Science and ASGN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Science Applications 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 Science Applications International 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 Science Applications i.e., Science Applications and ASGN go up and down completely randomly.
Pair Corralation between Science Applications and ASGN
Given the investment horizon of 90 days Science Applications International is expected to under-perform the ASGN. In addition to that, Science Applications is 1.22 times more volatile than ASGN Inc. It trades about -0.16 of its total potential returns per unit of risk. ASGN Inc is currently generating about -0.05 per unit of volatility. If you would invest 9,304 in ASGN Inc on August 24, 2024 and sell it today you would lose (389.00) from holding ASGN Inc or give up 4.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science Applications Internati vs. ASGN Inc
Performance |
| Timeline |
| Science Applications |
| ASGN Inc |
Science Applications and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Applications and ASGN
The main advantage of trading using opposite Science Applications and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Applications 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.| Science Applications vs. CACI International | Science Applications vs. CDW Corp | Science Applications vs. Gartner | Science Applications vs. Jack Henry Associates |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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