Correlation Between Mastech Holdings and Caldwell Partners
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Caldwell Partners 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 Caldwell Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and The Caldwell Partners, you can compare the effects of market volatilities on Mastech Holdings and Caldwell Partners 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 Caldwell Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Caldwell Partners.
Diversification Opportunities for Mastech Holdings and Caldwell Partners
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mastech and Caldwell is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and The Caldwell Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners 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 Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Caldwell Partners go up and down completely randomly.
Pair Corralation between Mastech Holdings and Caldwell Partners
Considering the 90-day investment horizon Mastech Holdings is expected to generate 0.51 times more return on investment than Caldwell Partners. However, Mastech Holdings is 1.95 times less risky than Caldwell Partners. It trades about 0.14 of its potential returns per unit of risk. The Caldwell Partners is currently generating about 0.06 per unit of risk. If you would invest 800.00 in Mastech Holdings on September 1, 2024 and sell it today you would earn a total of 740.00 from holding Mastech Holdings or generate 92.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastech Holdings vs. The Caldwell Partners
Performance |
| Timeline |
| Mastech Holdings |
| Caldwell Partners |
Mastech Holdings and Caldwell Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and Caldwell Partners
The main advantage of trading using opposite Mastech Holdings and Caldwell Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Caldwell Partners 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 Caldwell Partners will offset losses from the drop in Caldwell Partners' long position.| Mastech Holdings vs. EVI Industries | Mastech Holdings vs. LGL Group | Mastech Holdings vs. BG Staffing | Mastech Holdings vs. Issuer Direct Corp |
| Caldwell Partners vs. Trucept | Caldwell Partners vs. Randstad Holdings NV | Caldwell Partners vs. Futuris Company | Caldwell Partners vs. TrueBlue |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |