Correlation Between Mastech Holdings and Trucept

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

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

Diversification Opportunities for Mastech Holdings and Trucept

-0.64

Correlation Coefficient

Mastech Holdings  Trucept

Excellent diversification

The 3 months correlation between Mastech and Trucept is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mastech Holdings and Trucept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trucept 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 Trucept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trucept has no effect on the direction of Mastech Holdings i.e., Mastech Holdings and Trucept go up and down completely randomly.

Pair Corralation between Mastech Holdings and Trucept

Considering the 90-day investment horizon Mastech Holdings is expected to under-perform the Trucept. But the stock apears to be less risky and, when comparing its historical volatility, Mastech Holdings is 2.75 times less risky than Trucept. The stock trades about -0.11 of its potential returns per unit of risk. The Trucept is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3.99  in Trucept on December 29, 2024 and sell it today you would earn a total of  0.41  from holding Trucept or generate 10.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Mastech Holdings  vs.  Trucept

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.

Trucept

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trucept are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Trucept reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mastech Holdings and Trucept

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

The idea behind Mastech Holdings and Trucept 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.