Correlation Between Hillcrest Energy and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Hillcrest Energy 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 Hillcrest Energy and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillcrest Energy Technologies and IES Holdings, you can compare the effects of market volatilities on Hillcrest Energy 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 Hillcrest Energy with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillcrest Energy and IES Holdings.
Diversification Opportunities for Hillcrest Energy and IES Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hillcrest and IES is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hillcrest Energy Technologies and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Hillcrest Energy 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 Hillcrest Energy Technologies 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 Hillcrest Energy i.e., Hillcrest Energy and IES Holdings go up and down completely randomly.
Pair Corralation between Hillcrest Energy and IES Holdings
Assuming the 90 days horizon Hillcrest Energy Technologies is expected to under-perform the IES Holdings. In addition to that, Hillcrest Energy is 1.66 times more volatile than IES Holdings. It trades about -0.03 of its total potential returns per unit of risk. IES Holdings is currently generating about 0.14 per unit of volatility. If you would invest 5,591 in IES Holdings on September 12, 2024 and sell it today you would earn a total of 19,627 from holding IES Holdings or generate 351.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillcrest Energy Technologies vs. IES Holdings
Performance |
| Timeline |
| Hillcrest Energy Tec |
| IES Holdings |
Hillcrest Energy and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillcrest Energy and IES Holdings
The main advantage of trading using opposite Hillcrest Energy and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillcrest Energy 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.| Hillcrest Energy vs. Permian Resources | Hillcrest Energy vs. Devon Energy | Hillcrest Energy vs. EOG Resources | Hillcrest Energy vs. Coterra Energy |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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