Correlation Between Mastech Holdings and ManpowerGroup

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

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

Diversification Opportunities for Mastech Holdings and ManpowerGroup

-0.14

Correlation Coefficient

Mastech Holdings  ManpowerGroup

Good diversification

The 3 months correlation between Mastech and ManpowerGroup is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup 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 ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and ManpowerGroup go up and down completely randomly.

Pair Corralation between Mastech Holdings and ManpowerGroup

Considering the 90-day investment horizon Mastech Holdings is expected to under-perform the ManpowerGroup. In addition to that, Mastech Holdings is 2.12 times more volatile than ManpowerGroup. It trades about -0.18 of its total potential returns per unit of risk. ManpowerGroup is currently generating about -0.05 per unit of volatility. If you would invest  5,664  in ManpowerGroup on January 4, 2025 and sell it today you would lose (413.00) from holding ManpowerGroup or give up 7.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Mastech Holdings  vs.  ManpowerGroup

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.

ManpowerGroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days ManpowerGroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Mastech Holdings and ManpowerGroup

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

The idea behind Mastech Holdings and ManpowerGroup 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.