Correlation Between Webuild SpA and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Webuild SpA and IES Holdings 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 Webuild SpA and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webuild SpA ADR and IES Holdings, you can compare the effects of market volatilities on Webuild SpA and IES Holdings 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 Webuild SpA with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webuild SpA and IES Holdings.
Diversification Opportunities for Webuild SpA and IES Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Webuild and IES is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Webuild SpA ADR and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Webuild SpA 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 Webuild SpA ADR are associated (or correlated) with IES Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IES Holdings has no effect on the direction of Webuild SpA i.e., Webuild SpA and IES Holdings go up and down completely randomly.
Pair Corralation between Webuild SpA and IES Holdings
Assuming the 90 days horizon Webuild SpA is expected to generate 5.0 times less return on investment than IES Holdings. In addition to that, Webuild SpA is 1.33 times more volatile than IES Holdings. It trades about 0.02 of its total potential returns per unit of risk. IES Holdings is currently generating about 0.16 per unit of volatility. 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 Together |
| Strength | Weak |
| Accuracy | 65.45% |
| Values | Daily Returns |
Webuild SpA ADR vs. IES Holdings
Performance |
| Timeline |
| Webuild SpA ADR |
| IES Holdings |
Webuild SpA and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webuild SpA and IES Holdings
The main advantage of trading using opposite Webuild SpA and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webuild SpA position performs unexpectedly, IES Holdings 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 IES Holdings will offset losses from the drop in IES Holdings' long position.| Webuild SpA vs. Travis Perkins PLC | Webuild SpA vs. Antelope Enterprise Holdings | Webuild SpA vs. Intelligent Living Application | Webuild SpA vs. Beacon Roofing Supply |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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