Correlation Between Ford and ASGN
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and ASGN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ASGN Inc, you can compare the effects of market volatilities on Ford 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 Ford with a short position of ASGN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ASGN.
Diversification Opportunities for Ford and ASGN
Excellent diversification
The 3 months correlation between Ford and ASGN is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc and Ford 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 Ford Motor 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 Ford i.e., Ford and ASGN go up and down completely randomly.
Pair Corralation between Ford and ASGN
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.95 times more return on investment than ASGN. However, Ford Motor is 1.05 times less risky than ASGN. It trades about 0.13 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.07 per unit of risk. If you would invest 1,131 in Ford Motor on August 15, 2025 and sell it today you would earn a total of 214.00 from holding Ford Motor or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. ASGN Inc
Performance |
| Timeline |
| Ford Motor |
| ASGN Inc |
Ford and ASGN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ASGN
The main advantage of trading using opposite Ford and ASGN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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