Correlation Between IES Holdings and NV5 Global

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Can any of the company-specific risk be diversified away by investing in both IES Holdings and NV5 Global 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 NV5 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and NV5 Global, you can compare the effects of market volatilities on IES Holdings and NV5 Global 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 NV5 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and NV5 Global.

Diversification Opportunities for IES Holdings and NV5 Global

IESNV5Diversified AwayIESNV5Diversified Away100%
0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between IES and NV5 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and NV5 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV5 Global 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 NV5 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV5 Global has no effect on the direction of IES Holdings i.e., IES Holdings and NV5 Global go up and down completely randomly.

Pair Corralation between IES Holdings and NV5 Global

Given the investment horizon of 90 days IES Holdings is expected to under-perform the NV5 Global. In addition to that, IES Holdings is 3.59 times more volatile than NV5 Global. It trades about -0.25 of its total potential returns per unit of risk. NV5 Global is currently generating about -0.17 per unit of volatility. If you would invest  1,899  in NV5 Global on November 25, 2024 and sell it today you would lose (124.00) from holding NV5 Global or give up 6.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

IES Holdings  vs.  NV5 Global

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15IESC NVEE
       Timeline  
IES Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days IES Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb200220240260280300320
NV5 Global 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NV5 Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb171819202122

IES Holdings and NV5 Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.16-6.86-4.56-2.260.02.144.326.498.67 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15IESC NVEE
       Returns  

Pair Trading with IES Holdings and NV5 Global

The main advantage of trading using opposite IES Holdings and NV5 Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, NV5 Global 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 NV5 Global will offset losses from the drop in NV5 Global's long position.
The idea behind IES Holdings and NV5 Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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