Correlation Between IES Holdings and OriginClear
Can any of the company-specific risk be diversified away by investing in both IES Holdings and OriginClear 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 OriginClear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and OriginClear, you can compare the effects of market volatilities on IES Holdings and OriginClear 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 OriginClear. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and OriginClear.
Diversification Opportunities for IES Holdings and OriginClear
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IES and OriginClear is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and OriginClear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OriginClear 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 OriginClear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OriginClear has no effect on the direction of IES Holdings i.e., IES Holdings and OriginClear go up and down completely randomly.
Pair Corralation between IES Holdings and OriginClear
Given the investment horizon of 90 days IES Holdings is expected to under-perform the OriginClear. But the stock apears to be less risky and, when comparing its historical volatility, IES Holdings is 2.76 times less risky than OriginClear. The stock trades about -0.2 of its potential returns per unit of risk. The OriginClear is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.29 in OriginClear on November 27, 2024 and sell it today you would earn a total of 0.04 from holding OriginClear or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
IES Holdings vs. OriginClear
Performance |
| Timeline |
| IES Holdings |
| OriginClear |
IES Holdings and OriginClear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and OriginClear
The main advantage of trading using opposite IES Holdings and OriginClear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, OriginClear 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 OriginClear will offset losses from the drop in OriginClear'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 |
| OriginClear vs. Agilyx AS | OriginClear vs. EcoPlus | OriginClear vs. BQE Water | OriginClear vs. LiCycle Holdings Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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