Correlation Between IES Holdings and Summit
Can any of the company-specific risk be diversified away by investing in both IES Holdings and Summit 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 Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and Summit, you can compare the effects of market volatilities on IES Holdings and Summit 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 Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and Summit.
Diversification Opportunities for IES Holdings and Summit
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IES and Summit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Summit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit 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 Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit has no effect on the direction of IES Holdings i.e., IES Holdings and Summit go up and down completely randomly.
Pair Corralation between IES Holdings and Summit
Assuming the 90 days trading horizon IES Holdings is expected to generate 0.83 times more return on investment than Summit. However, IES Holdings is 1.2 times less risky than Summit. It trades about 0.14 of its potential returns per unit of risk. Summit is currently generating about 0.08 per unit of risk. If you would invest 2,068,000 in IES Holdings on August 25, 2024 and sell it today you would earn a total of 267,000 from holding IES Holdings or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. Summit
Performance |
| Timeline |
| IES Holdings |
| Summit |
IES Holdings and Summit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and Summit
The main advantage of trading using opposite IES Holdings and Summit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Summit 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 Summit will offset losses from the drop in Summit's long position.| IES Holdings vs. Israel Canada | IES Holdings vs. Azrieli Group | IES Holdings vs. Delek Group | IES Holdings vs. Shikun Binui |
| Summit vs. Alony Hetz Properties | Summit vs. The Phoenix Holdings | Summit vs. Migdal Insurance | Summit vs. Big Shopping Centers |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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