Correlation Between ASGN and Kanzhun

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

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

Diversification Opportunities for ASGN and Kanzhun

0.71

Correlation Coefficient

ASGN  Kanzhun

Poor diversification

The 3 months correlation between ASGN and Kanzhun is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR and ASGN 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 ASGN Inc are associated (or correlated) with Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of ASGN i.e., ASGN and Kanzhun go up and down completely randomly.

Pair Corralation between ASGN and Kanzhun

Given the investment horizon of 90 days ASGN Inc is expected to under-perform the Kanzhun. But the stock apears to be less risky and, when comparing its historical volatility, ASGN Inc is 1.37 times less risky than Kanzhun. The stock trades about -0.22 of its potential returns per unit of risk. The Kanzhun Ltd ADR is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,910  in Kanzhun Ltd ADR on January 19, 2024 and sell it today you would lose (126.00) from holding Kanzhun Ltd ADR or give up 6.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ASGN Inc  vs.  Kanzhun Ltd ADR

ASGN Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASGN Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Kanzhun Ltd ADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASGN and Kanzhun

The main advantage of trading using opposite ASGN and Kanzhun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN position performs unexpectedly, Kanzhun 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 Kanzhun will offset losses from the drop in Kanzhun's long position.

The idea behind ASGN Inc and Kanzhun Ltd ADR 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.