Correlation Between Mastech Holdings and Trucept
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Trucept 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 Trucept into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and Trucept, you can compare the effects of market volatilities on Mastech Holdings and Trucept 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 Trucept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Trucept.
Diversification Opportunities for Mastech Holdings and Trucept
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mastech and Trucept is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Trucept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trucept 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 Trucept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trucept has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Trucept go up and down completely randomly.
Pair Corralation between Mastech Holdings and Trucept
Considering the 90-day investment horizon Mastech Holdings is expected to generate 1.62 times less return on investment than Trucept. But when comparing it to its historical volatility, Mastech Holdings is 2.99 times less risky than Trucept. It trades about 0.14 of its potential returns per unit of risk. Trucept is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.42 in Trucept on September 1, 2024 and sell it today you would earn a total of 1.08 from holding Trucept or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Mastech Holdings vs. Trucept
Performance |
| Timeline |
| Mastech Holdings |
| Trucept |
Mastech Holdings and Trucept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and Trucept
The main advantage of trading using opposite Mastech Holdings and Trucept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Trucept 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 Trucept will offset losses from the drop in Trucept's long position.| Mastech Holdings vs. EVI Industries | Mastech Holdings vs. LGL Group | Mastech Holdings vs. BG Staffing | Mastech Holdings vs. Issuer Direct Corp |
| Trucept vs. The Caldwell Partners | Trucept vs. Futuris Company | Trucept vs. Kelly Services A | Trucept vs. Heidrick Struggles International |
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 Stocks Directory module to find actively traded stocks across global markets.
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