Correlation Between Mastech Holdings and DHI
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and DHI 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 DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and DHI Group, you can compare the effects of market volatilities on Mastech Holdings and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and DHI.
Diversification Opportunities for Mastech Holdings and DHI
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mastech and DHI is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and DHI go up and down completely randomly.
Pair Corralation between Mastech Holdings and DHI
Considering the 90-day investment horizon Mastech Holdings is expected to generate 0.8 times more return on investment than DHI. However, Mastech Holdings is 1.25 times less risky than DHI. It trades about -0.03 of its potential returns per unit of risk. DHI Group is currently generating about -0.04 per unit of risk. If you would invest 1,465 in Mastech Holdings on January 19, 2024 and sell it today you would lose (575.00) from holding Mastech Holdings or give up 39.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastech Holdings vs. DHI Group
Performance |
| Timeline |
| Mastech Holdings |
| DHI Group |
Mastech Holdings and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and DHI
The main advantage of trading using opposite Mastech Holdings and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| Mastech Holdings vs. EVI Industries | Mastech Holdings vs. LGL Group | Mastech Holdings vs. BG Staffing | Mastech Holdings vs. Issuer Direct Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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