Correlation Between IES Holdings and Israel Canada
Can any of the company-specific risk be diversified away by investing in both IES Holdings and Israel Canada 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 Israel Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and Israel Canada, you can compare the effects of market volatilities on IES Holdings and Israel Canada 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 Israel Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and Israel Canada.
Diversification Opportunities for IES Holdings and Israel Canada
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IES and Israel is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada 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 Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of IES Holdings i.e., IES Holdings and Israel Canada go up and down completely randomly.
Pair Corralation between IES Holdings and Israel Canada
Assuming the 90 days trading horizon IES Holdings is expected to generate 6.0 times less return on investment than Israel Canada. But when comparing it to its historical volatility, IES Holdings is 1.41 times less risky than Israel Canada. It trades about 0.02 of its potential returns per unit of risk. Israel Canada is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 97,962 in Israel Canada on August 25, 2024 and sell it today you would earn a total of 53,338 from holding Israel Canada or generate 54.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.56% |
| Values | Daily Returns |
IES Holdings vs. Israel Canada
Performance |
| Timeline |
| IES Holdings |
| Israel Canada |
IES Holdings and Israel Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and Israel Canada
The main advantage of trading using opposite IES Holdings and Israel Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Israel Canada 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 Israel Canada will offset losses from the drop in Israel Canada's long position.| IES Holdings vs. Summit | IES Holdings vs. Harel Insurance Investments | IES Holdings vs. Delek Automotive Systems | IES Holdings vs. Sella Real Estate |
| Israel Canada vs. Azrieli Group | Israel Canada vs. Delek Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Israel Discount Bank |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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