Correlation Between Wex and ASGN
Can any of the company-specific risk be diversified away by investing in both Wex 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 Wex and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wex Inc and ASGN Inc, you can compare the effects of market volatilities on Wex 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 Wex with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wex and ASGN.
Diversification Opportunities for Wex and ASGN
Weak diversification
The 3 months correlation between Wex and ASGN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wex Inc and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Wex 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 Wex Inc 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 Wex i.e., Wex and ASGN go up and down completely randomly.
Pair Corralation between Wex and ASGN
Considering the 90-day investment horizon Wex Inc is expected to generate 0.52 times more return on investment than ASGN. However, Wex Inc is 1.94 times less risky than ASGN. It trades about -0.08 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.22 per unit of risk. If you would invest 18,299 in Wex Inc on September 12, 2024 and sell it today you would lose (405.00) from holding Wex Inc or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wex Inc vs. ASGN Inc
Performance |
| Timeline |
| Wex Inc |
| ASGN Inc |
Wex and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wex and ASGN
The main advantage of trading using opposite Wex and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wex 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.| Wex vs. CSG Systems International | Wex vs. VeriSign | Wex vs. Consensus Cloud Solutions | Wex vs. Global Blue 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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