Correlation Between SBC Communications and ASGN
Can any of the company-specific risk be diversified away by investing in both SBC Communications 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 SBC Communications and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBC Communications and ASGN Inc, you can compare the effects of market volatilities on SBC Communications 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 SBC Communications with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Communications and ASGN.
Diversification Opportunities for SBC Communications and ASGN
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBC and ASGN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SBC Communications and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and SBC Communications 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 SBC Communications 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 SBC Communications i.e., SBC Communications and ASGN go up and down completely randomly.
Pair Corralation between SBC Communications and ASGN
Considering the 90-day investment horizon SBC Communications is expected to under-perform the ASGN. In addition to that, SBC Communications is 3.35 times more volatile than ASGN Inc. It trades about -0.3 of its total potential returns per unit of risk. ASGN Inc is currently generating about 0.21 per unit of volatility. If you would invest 8,469 in ASGN Inc on October 20, 2024 and sell it today you would earn a total of 376.00 from holding ASGN Inc or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBC Communications vs. ASGN Inc
Performance |
| Timeline |
| SBC Communications |
| ASGN Inc |
SBC Communications and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Communications and ASGN
The main advantage of trading using opposite SBC Communications and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Communications 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.| SBC Communications vs. Treasury Wine Estates | SBC Communications vs. Nascent Wine | SBC Communications vs. Vodka Brands Corp | SBC Communications vs. Celsius Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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