Correlation Between IES Holdings and QC Copper
Can any of the company-specific risk be diversified away by investing in both IES Holdings and QC Copper 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 QC Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IES Holdings and QC Copper and, you can compare the effects of market volatilities on IES Holdings and QC Copper 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 QC Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of IES Holdings and QC Copper.
Diversification Opportunities for IES Holdings and QC Copper
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IES and QCCUF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper 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 QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of IES Holdings i.e., IES Holdings and QC Copper go up and down completely randomly.
Pair Corralation between IES Holdings and QC Copper
Given the investment horizon of 90 days IES Holdings is expected to generate 0.6 times more return on investment than QC Copper. However, IES Holdings is 1.65 times less risky than QC Copper. It trades about 0.16 of its potential returns per unit of risk. QC Copper and is currently generating about 0.02 per unit of risk. If you would invest 3,230 in IES Holdings on September 3, 2024 and sell it today you would earn a total of 27,756 from holding IES Holdings or generate 859.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IES Holdings vs. QC Copper and
Performance |
| Timeline |
| IES Holdings |
| QC Copper |
IES Holdings and QC Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IES Holdings and QC Copper
The main advantage of trading using opposite IES Holdings and QC Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, QC Copper 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 QC Copper will offset losses from the drop in QC Copper'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 |
| QC Copper vs. Copper Fox Metals | QC Copper vs. Imperial Metals | QC Copper vs. Bell Copper | QC Copper vs. Arizona Sonoran Copper |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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