Correlation Between TrueBlue and Mastech Holdings

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

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

Diversification Opportunities for TrueBlue and Mastech Holdings

-0.42

Correlation Coefficient

TrueBlue  Mastech Holdings

Very good diversification

The 3 months correlation between TrueBlue and Mastech is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding TrueBlue and Mastech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastech Holdings and TrueBlue 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 TrueBlue 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 TrueBlue i.e., TrueBlue and Mastech Holdings go up and down completely randomly.

Pair Corralation between TrueBlue and Mastech Holdings

Considering the 90-day investment horizon TrueBlue is expected to under-perform the Mastech Holdings. But the stock apears to be less risky and, when comparing its historical volatility, TrueBlue is 1.78 times less risky than Mastech Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The Mastech Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,012  in Mastech Holdings on September 3, 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TrueBlue  vs.  Mastech Holdings

TrueBlue

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TrueBlue has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, TrueBlue is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 TrueBlue and Mastech Holdings

The main advantage of trading using opposite TrueBlue and Mastech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrueBlue 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 TrueBlue 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.