Correlation Between Mastech Holdings and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Advantage Solutions 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 Mastech Holdings and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and Advantage Solutions, you can compare the effects of market volatilities on Mastech Holdings and Advantage Solutions 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 Mastech Holdings with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Advantage Solutions.
Diversification Opportunities for Mastech Holdings and Advantage Solutions
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mastech and Advantage is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Mastech Holdings 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 Mastech Holdings are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Advantage Solutions go up and down completely randomly.
Pair Corralation between Mastech Holdings and Advantage Solutions
Considering the 90-day investment horizon Mastech Holdings is expected to generate 0.44 times more return on investment than Advantage Solutions. However, Mastech Holdings is 2.27 times less risky than Advantage Solutions. It trades about 0.13 of its potential returns per unit of risk. Advantage Solutions is currently generating about 0.0 per unit of risk. If you would invest 982.00 in Mastech Holdings on October 20, 2024 and sell it today you would earn a total of 445.00 from holding Mastech Holdings or generate 45.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.72% |
| Values | Daily Returns |
Mastech Holdings vs. Advantage Solutions
Performance |
| Timeline |
| Mastech Holdings |
| Advantage Solutions |
Mastech Holdings and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and Advantage Solutions
The main advantage of trading using opposite Mastech Holdings and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| Mastech Holdings vs. EVI Industries | Mastech Holdings vs. LGL Group | Mastech Holdings vs. BG Staffing | Mastech Holdings vs. Issuer Direct Corp |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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