Correlation Between IES Holdings and MYR
Can any of the company-specific risk be diversified away by investing in both IES Holdings and MYR 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 MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and MYR Group, you can compare the effects of market volatilities on IES Holdings and MYR 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 MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and MYR.
Diversification Opportunities for IES Holdings and MYR
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IES and MYR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of IES Holdings i.e., IES Holdings and MYR go up and down completely randomly.
Pair Corralation between IES Holdings and MYR
Given the investment horizon of 90 days IES Holdings is expected to generate 1.11 times less return on investment than MYR. But when comparing it to its historical volatility, IES Holdings is 1.04 times less risky than MYR. It trades about 0.36 of its potential returns per unit of risk. MYR Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 11,676 in MYR Group on August 28, 2024 and sell it today you would earn a total of 4,291 from holding MYR Group or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. MYR Group
Performance |
| Timeline |
| IES Holdings |
| MYR Group |
IES Holdings and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and MYR
The main advantage of trading using opposite IES Holdings and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR'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 |
| MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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