Correlation Between IES Holdings and EMCOR
Can any of the company-specific risk be diversified away by investing in both IES Holdings and EMCOR 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 EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and EMCOR Group, you can compare the effects of market volatilities on IES Holdings and EMCOR 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 EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and EMCOR.
Diversification Opportunities for IES Holdings and EMCOR
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IES and EMCOR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group 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 EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of IES Holdings i.e., IES Holdings and EMCOR go up and down completely randomly.
Pair Corralation between IES Holdings and EMCOR
Given the investment horizon of 90 days IES Holdings is expected to generate 1.82 times more return on investment than EMCOR. However, IES Holdings is 1.82 times more volatile than EMCOR Group. It trades about 0.09 of its potential returns per unit of risk. EMCOR Group is currently generating about 0.09 per unit of risk. If you would invest 16,709 in IES Holdings on November 2, 2024 and sell it today you would earn a total of 5,985 from holding IES Holdings or generate 35.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. EMCOR Group
Performance |
| Timeline |
| IES Holdings |
| EMCOR Group |
IES Holdings and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and EMCOR
The main advantage of trading using opposite IES Holdings and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| IES Holdings vs. EMCOR Group | IES Holdings vs. Comfort Systems USA | IES Holdings vs. Primoris Services | IES Holdings vs. Granite Construction Incorporated |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |