Correlation Between IES Holdings and Poalim Ibi
Can any of the company-specific risk be diversified away by investing in both IES Holdings and Poalim Ibi 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 Poalim Ibi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and Poalim Ibi, you can compare the effects of market volatilities on IES Holdings and Poalim Ibi 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 Poalim Ibi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and Poalim Ibi.
Diversification Opportunities for IES Holdings and Poalim Ibi
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IES and Poalim is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Poalim Ibi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poalim Ibi 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 Poalim Ibi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poalim Ibi has no effect on the direction of IES Holdings i.e., IES Holdings and Poalim Ibi go up and down completely randomly.
Pair Corralation between IES Holdings and Poalim Ibi
Assuming the 90 days trading horizon IES Holdings is expected to under-perform the Poalim Ibi. But the stock apears to be less risky and, when comparing its historical volatility, IES Holdings is 1.4 times less risky than Poalim Ibi. The stock trades about -0.23 of its potential returns per unit of risk. The Poalim Ibi is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 81,400 in Poalim Ibi on November 28, 2024 and sell it today you would earn a total of 10,420 from holding Poalim Ibi or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
IES Holdings vs. Poalim Ibi
Performance |
| Timeline |
| IES Holdings |
| Poalim Ibi |
IES Holdings and Poalim Ibi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and Poalim Ibi
The main advantage of trading using opposite IES Holdings and Poalim Ibi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Poalim Ibi 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 Poalim Ibi will offset losses from the drop in Poalim Ibi'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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