Correlation Between Mastech Holdings and Korn Ferry

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

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

Diversification Opportunities for Mastech Holdings and Korn Ferry

0.75

Correlation Coefficient

Mastech Holdings  Korn Ferry

Poor diversification

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

Pair Corralation between Mastech Holdings and Korn Ferry

Considering the 90-day investment horizon Mastech Holdings is expected to generate 2.78 times more return on investment than Korn Ferry. However, Mastech Holdings is 2.78 times more volatile than Korn Ferry. It trades about 0.15 of its potential returns per unit of risk. Korn Ferry is currently generating about 0.09 per unit of risk. If you would invest  1,012  in Mastech Holdings on August 31, 2024 and sell it today you would earn a total of  528.00  from holding Mastech Holdings or generate 52.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Mastech Holdings  vs.  Korn Ferry

Mastech Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastech Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Mastech Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Korn Ferry

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Korn Ferry are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Korn Ferry may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Mastech Holdings and Korn Ferry

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

The idea behind Mastech Holdings and Korn Ferry 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..