Correlation Between Mastech Holdings and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Automatic Data 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 Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and Automatic Data Processing, you can compare the effects of market volatilities on Mastech Holdings and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Automatic Data.
Diversification Opportunities for Mastech Holdings and Automatic Data
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mastech and Automatic is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Automatic Data go up and down completely randomly.
Pair Corralation between Mastech Holdings and Automatic Data
Considering the 90-day investment horizon Mastech Holdings is expected to generate 1.22 times more return on investment than Automatic Data. However, Mastech Holdings is 1.22 times more volatile than Automatic Data Processing. It trades about 0.08 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.11 per unit of risk. If you would invest 873.00 in Mastech Holdings on January 20, 2024 and sell it today you would earn a total of 17.00 from holding Mastech Holdings or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastech Holdings vs. Automatic Data Processing
Performance |
| Timeline |
| Mastech Holdings |
| Automatic Data Processing |
Mastech Holdings and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and Automatic Data
The main advantage of trading using opposite Mastech Holdings and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Mastech Holdings vs. ExlService Holdings | Mastech Holdings vs. WNS Holdings | Mastech Holdings vs. Gartner | Mastech Holdings vs. The Hackett Group |
| Automatic Data vs. ExlService Holdings | Automatic Data vs. WNS Holdings | Automatic Data vs. Gartner | Automatic Data vs. The Hackett Group |
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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