Correlation Between IES Holdings and Alrov Properties
Can any of the company-specific risk be diversified away by investing in both IES Holdings and Alrov Properties 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 Alrov Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and Alrov Properties Lodgings, you can compare the effects of market volatilities on IES Holdings and Alrov Properties 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 Alrov Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and Alrov Properties.
Diversification Opportunities for IES Holdings and Alrov Properties
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IES and Alrov is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Alrov Properties Lodgings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alrov Properties Lodgings 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 Alrov Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alrov Properties Lodgings has no effect on the direction of IES Holdings i.e., IES Holdings and Alrov Properties go up and down completely randomly.
Pair Corralation between IES Holdings and Alrov Properties
Assuming the 90 days trading horizon IES Holdings is expected to generate 1.12 times more return on investment than Alrov Properties. However, IES Holdings is 1.12 times more volatile than Alrov Properties Lodgings. It trades about 0.65 of its potential returns per unit of risk. Alrov Properties Lodgings is currently generating about 0.58 per unit of risk. If you would invest 1,958,000 in IES Holdings on August 26, 2024 and sell it today you would earn a total of 377,000 from holding IES Holdings or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. Alrov Properties Lodgings
Performance |
| Timeline |
| IES Holdings |
| Alrov Properties Lodgings |
IES Holdings and Alrov Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and Alrov Properties
The main advantage of trading using opposite IES Holdings and Alrov Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Alrov Properties 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 Alrov Properties will offset losses from the drop in Alrov Properties' long position.| IES Holdings vs. Israel Canada | IES Holdings vs. Delek Group | IES Holdings vs. Shikun Binui | IES Holdings vs. Israel Discount Bank |
| Alrov Properties vs. Melisron | Alrov Properties vs. Fattal 1998 Holdings | Alrov Properties vs. Azrieli Group | Alrov Properties vs. Clal Insurance Enterprises |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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