Correlation Between IES Holdings and Correlate Infrastructure

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

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

Diversification Opportunities for IES Holdings and Correlate Infrastructure

-0.34

Correlation Coefficient

IES Holdings  Correlate Infrastructure

Very good diversification

The 3 months correlation between IES and Correlate is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Correlate Infrastructure Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Correlate Infrastructure and IES 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 IES Holdings are associated (or correlated) with Correlate Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Correlate Infrastructure has no effect on the direction of IES Holdings i.e., IES Holdings and Correlate Infrastructure go up and down completely randomly.

Pair Corralation between IES Holdings and Correlate Infrastructure

Given the investment horizon of 90 days IES Holdings is expected to generate 1.24 times less return on investment than Correlate Infrastructure. But when comparing it to its historical volatility, IES Holdings is 5.45 times less risky than Correlate Infrastructure. It trades about 0.16 of its potential returns per unit of risk. Correlate Infrastructure Partners is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Correlate Infrastructure Partners on September 3, 2024 and sell it today you would lose (129.00) from holding Correlate Infrastructure Partners or give up 92.14% of portfolio value over 90 days.

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

IES Holdings  vs.  Correlate Infrastructure Partn

IES Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IES Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, IES Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Correlate Infrastructure

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Correlate Infrastructure Partners are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Correlate Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IES Holdings and Correlate Infrastructure

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

The idea behind IES Holdings and Correlate Infrastructure Partners 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 CEOs Directory module to screen CEOs from public companies around the world.