Correlation Between Kelly Services and Mastech Holdings

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

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

Diversification Opportunities for Kelly Services and Mastech Holdings

0.41

Correlation Coefficient

Kelly Services  Mastech Holdings

Very weak diversification

The 3 months correlation between Kelly and Mastech is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and Kelly Services 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 Kelly Services A are associated (or correlated) with Mastech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastech Holdings has no effect on the direction of Kelly Services i.e., Kelly Services and Mastech Holdings go up and down completely randomly.

Pair Corralation between Kelly Services and Mastech Holdings

Assuming the 90 days horizon Kelly Services A is expected to generate 0.47 times more return on investment than Mastech Holdings. However, Kelly Services A is 2.14 times less risky than Mastech Holdings. It trades about 0.01 of its potential returns per unit of risk. Mastech Holdings is currently generating about -0.11 per unit of risk. If you would invest  1,358  in Kelly Services A on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Kelly Services A or generate 0.07% return on investment over 90 days.

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

Kelly Services A  vs.  Mastech Holdings

Kelly Services A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kelly Services A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kelly Services is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kelly Services and Mastech Holdings

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

The idea behind Kelly Services A and Mastech Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.