Correlation Between CBIZ and Mastech Holdings
Can any of the company-specific risk be diversified away by investing in both CBIZ and Mastech Holdings 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 CBIZ and Mastech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBIZ Inc and Mastech Holdings, you can compare the effects of market volatilities on CBIZ and Mastech Holdings 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 CBIZ with a short position of Mastech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and Mastech Holdings.
Diversification Opportunities for CBIZ and Mastech Holdings
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CBIZ and Mastech is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and CBIZ 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 CBIZ Inc are associated (or correlated) with Mastech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastech Holdings has no effect on the direction of CBIZ i.e., CBIZ and Mastech Holdings go up and down completely randomly.
Pair Corralation between CBIZ and Mastech Holdings
Considering the 90-day investment horizon CBIZ Inc is expected to generate 0.51 times more return on investment than Mastech Holdings. However, CBIZ Inc is 1.98 times less risky than Mastech Holdings. It trades about 0.08 of its potential returns per unit of risk. Mastech Holdings is currently generating about 0.02 per unit of risk. If you would invest 4,639 in CBIZ Inc on October 20, 2024 and sell it today you would earn a total of 3,811 from holding CBIZ Inc or generate 82.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBIZ Inc vs. Mastech Holdings
Performance |
| Timeline |
| CBIZ Inc |
| Mastech Holdings |
CBIZ and Mastech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBIZ and Mastech Holdings
The main advantage of trading using opposite CBIZ and Mastech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBIZ position performs unexpectedly, Mastech Holdings 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 Mastech Holdings will offset losses from the drop in Mastech Holdings' long position.The idea behind CBIZ Inc and Mastech Holdings 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.| Mastech Holdings vs. EVI Industries | Mastech Holdings vs. LGL Group | Mastech Holdings vs. BG Staffing | Mastech Holdings vs. Issuer Direct Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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