Correlation Between Mastech Holdings and Acme United

Can any of the company-specific risk be diversified away by investing in both Mastech Holdings and Acme United 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 Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mastech Holdings and Acme United, you can compare the effects of market volatilities on Mastech Holdings and Acme United 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 Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastech Holdings and Acme United.

Diversification Opportunities for Mastech Holdings and Acme United

-0.75

Correlation Coefficient

Mastech Holdings  Acme United

Pay attention - limited upside

The 3 months correlation between Mastech and Acme is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Acme United go up and down completely randomly.

Pair Corralation between Mastech Holdings and Acme United

Considering the 90-day investment horizon Mastech Holdings is expected to under-perform the Acme United. In addition to that, Mastech Holdings is 1.43 times more volatile than Acme United. It trades about -0.07 of its total potential returns per unit of risk. Acme United is currently generating about -0.04 per unit of volatility. If you would invest  3,655  in Acme United on January 7, 2025 and sell it today you would lose (95.00) from holding Acme United or give up 2.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mastech Holdings  vs.  Acme United

Mastech Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mastech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Acme United

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Acme United are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental indicators, Acme United may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Mastech Holdings and Acme United

The main advantage of trading using opposite Mastech Holdings and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastech Holdings position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.

The idea behind Mastech Holdings and Acme United 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.