Correlation Between IES Holdings and Reit 1
Can any of the company-specific risk be diversified away by investing in both IES Holdings and Reit 1 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 Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and Reit 1, you can compare the effects of market volatilities on IES Holdings and Reit 1 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 Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and Reit 1.
Diversification Opportunities for IES Holdings and Reit 1
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IES and Reit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 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 Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of IES Holdings i.e., IES Holdings and Reit 1 go up and down completely randomly.
Pair Corralation between IES Holdings and Reit 1
Assuming the 90 days trading horizon IES Holdings is expected to generate 1.03 times more return on investment than Reit 1. However, IES Holdings is 1.03 times more volatile than Reit 1. It trades about 0.62 of its potential returns per unit of risk. Reit 1 is currently generating about 0.52 per unit of risk. If you would invest 1,958,000 in IES Holdings on August 29, 2024 and sell it today you would earn a total of 403,000 from holding IES Holdings or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. Reit 1
Performance |
| Timeline |
| IES Holdings |
| Reit 1 |
IES Holdings and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and Reit 1
The main advantage of trading using opposite IES Holdings and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1'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 |
| Reit 1 vs. Sella Real Estate | Reit 1 vs. Alony Hetz Properties | Reit 1 vs. Azrieli Group | Reit 1 vs. Amot Investments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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