Correlation Between Ampco Pittsburgh and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh and IES 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 Ampco Pittsburgh and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and IES Holdings, you can compare the effects of market volatilities on Ampco Pittsburgh and IES 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 Ampco Pittsburgh with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and IES Holdings.
Diversification Opportunities for Ampco Pittsburgh and IES Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampco and IES is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with IES Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IES Holdings has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and IES Holdings go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and IES Holdings
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the IES Holdings. In addition to that, Ampco Pittsburgh is 1.15 times more volatile than IES Holdings. It trades about -0.01 of its total potential returns per unit of risk. IES Holdings is currently generating about 0.31 per unit of volatility. If you would invest 21,078 in IES Holdings on August 24, 2024 and sell it today you would earn a total of 5,969 from holding IES Holdings or generate 28.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. IES Holdings
Performance |
| Timeline |
| Ampco Pittsburgh |
| IES Holdings |
Ampco Pittsburgh and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and IES Holdings
The main advantage of trading using opposite Ampco Pittsburgh and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh position performs unexpectedly, IES 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 IES Holdings will offset losses from the drop in IES Holdings' long position.| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
| IES Holdings vs. EMCOR Group | IES Holdings vs. Comfort Systems USA | IES Holdings vs. Primoris Services | IES Holdings vs. Granite Construction Incorporated |
Check out your portfolio center.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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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