Correlation Between Mastech Holdings and Insperity
Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Insperity 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 Insperity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastech Holdings and Insperity, you can compare the effects of market volatilities on Mastech Holdings and Insperity 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 Insperity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Insperity.
Diversification Opportunities for Mastech Holdings and Insperity
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mastech and Insperity is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Insperity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insperity 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 Insperity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insperity has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Insperity go up and down completely randomly.
Pair Corralation between Mastech Holdings and Insperity
Considering the 90-day investment horizon Mastech Holdings is expected to under-perform the Insperity. In addition to that, Mastech Holdings is 1.08 times more volatile than Insperity. It trades about -0.07 of its total potential returns per unit of risk. Insperity is currently generating about 0.1 per unit of volatility. If you would invest 10,569 in Insperity on January 25, 2024 and sell it today you would earn a total of 296.00 from holding Insperity or generate 2.8% 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. Insperity
Performance |
| Timeline |
| Mastech Holdings |
| Insperity |
Mastech Holdings and Insperity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastech Holdings and Insperity
The main advantage of trading using opposite Mastech Holdings and Insperity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Insperity 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 Insperity will offset losses from the drop in Insperity's long position.The idea behind Mastech Holdings and Insperity 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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