Correlation Between Kforce and Mastech Holdings
Can any of the company-specific risk be diversified away by investing in both Kforce 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 Kforce and Mastech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kforce Inc and Mastech Holdings, you can compare the effects of market volatilities on Kforce 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 Kforce with a short position of Mastech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Mastech Holdings.
Diversification Opportunities for Kforce and Mastech Holdings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kforce and Mastech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and Kforce 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 Kforce 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 Kforce i.e., Kforce and Mastech Holdings go up and down completely randomly.
Pair Corralation between Kforce and Mastech Holdings
Given the investment horizon of 90 days Kforce Inc is expected to generate 0.33 times more return on investment than Mastech Holdings. However, Kforce Inc is 3.03 times less risky than Mastech Holdings. It trades about 0.05 of its potential returns per unit of risk. Mastech Holdings is currently generating about 0.01 per unit of risk. If you would invest 5,540 in Kforce Inc on November 2, 2024 and sell it today you would earn a total of 59.00 from holding Kforce Inc or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kforce Inc vs. Mastech Holdings
Performance |
| Timeline |
| Kforce Inc |
| Mastech Holdings |
Kforce and Mastech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kforce and Mastech Holdings
The main advantage of trading using opposite Kforce and Mastech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kforce 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.| Kforce vs. Heidrick Struggles International | Kforce vs. ManpowerGroup | Kforce vs. Korn Ferry | Kforce vs. Hudson Global |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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