Correlation Between Acacia Research and ASGN

Can any of the company-specific risk be diversified away by investing in both Acacia Research 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 Acacia Research and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acacia Research and ASGN Inc, you can compare the effects of market volatilities on Acacia Research 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 Acacia Research with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acacia Research and ASGN.

Diversification Opportunities for Acacia Research and ASGN

-0.2

Correlation Coefficient

Acacia Research  ASGN

Good diversification

The 3 months correlation between Acacia and ASGN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Acacia Research and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Acacia Research 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 Acacia Research 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 Acacia Research i.e., Acacia Research and ASGN go up and down completely randomly.

Pair Corralation between Acacia Research and ASGN

Given the investment horizon of 90 days Acacia Research is expected to generate 1.08 times more return on investment than ASGN. However, Acacia Research is 1.08 times more volatile than ASGN Inc. It trades about 0.42 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.19 per unit of risk. If you would invest  489.00  in Acacia Research on February 28, 2024 and sell it today you would earn a total of  66.00  from holding Acacia Research or generate 13.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Acacia Research  vs.  ASGN Inc

Acacia Research

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Acacia Research are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Acacia Research reported solid returns over the last few months and may actually be approaching a breakup point.

ASGN Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASGN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, ASGN is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Acacia Research and ASGN

The main advantage of trading using opposite Acacia Research and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acacia Research 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.

The idea behind Acacia Research and ASGN Inc 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.