Correlation Between Korn Ferry and Mastech Holdings

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Can any of the company-specific risk be diversified away by investing in both Korn Ferry 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 Korn Ferry and Mastech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korn Ferry and Mastech Holdings, you can compare the effects of market volatilities on Korn Ferry 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 Korn Ferry with a short position of Mastech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korn Ferry and Mastech Holdings.

Diversification Opportunities for Korn Ferry and Mastech Holdings

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Korn and Mastech is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Korn Ferry and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and Korn Ferry 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 Korn Ferry 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 Korn Ferry i.e., Korn Ferry and Mastech Holdings go up and down completely randomly.

Pair Corralation between Korn Ferry and Mastech Holdings

Considering the 90-day investment horizon Korn Ferry is expected to generate 0.5 times more return on investment than Mastech Holdings. However, Korn Ferry is 1.99 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  4,940  in Korn Ferry on December 30, 2023 and sell it today you would earn a total of  1,636  from holding Korn Ferry or generate 33.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Korn Ferry  vs.  Mastech Holdings

 Performance 
       Timeline  
Korn Ferry 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Korn Ferry are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Korn Ferry showed solid returns over the last few months and may actually be approaching a breakup point.
Mastech Holdings 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Mastech Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Mastech Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Korn Ferry and Mastech Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Korn Ferry and Mastech Holdings

The main advantage of trading using opposite Korn Ferry and Mastech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korn Ferry 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 Korn Ferry 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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