Correlation Between Hudson Global and Mastech Holdings

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

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

Diversification Opportunities for Hudson Global and Mastech Holdings

-0.2

Correlation Coefficient

Hudson Global  Mastech Holdings

Good diversification

The 3 months correlation between Hudson and Mastech is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Global and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and Hudson Global 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 Hudson Global 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 Hudson Global i.e., Hudson Global and Mastech Holdings go up and down completely randomly.

Pair Corralation between Hudson Global and Mastech Holdings

Given the investment horizon of 90 days Hudson Global is expected to under-perform the Mastech Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Global is 1.8 times less risky than Mastech Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Mastech Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  963.00  in Mastech Holdings on August 30, 2024 and sell it today you would earn a total of  528.00  from holding Mastech Holdings or generate 54.83% return on investment over 90 days.

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

Hudson Global  vs.  Mastech Holdings

Hudson Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Hudson Global and Mastech Holdings

The main advantage of trading using opposite Hudson Global and Mastech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Global 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 Hudson Global 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.