Correlation Between Matrix Service and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Matrix Service 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 Matrix Service and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matrix Service Co and IES Holdings, you can compare the effects of market volatilities on Matrix Service 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 Matrix Service with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matrix Service and IES Holdings.
Diversification Opportunities for Matrix Service and IES Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matrix and IES is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Matrix Service Co and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Matrix Service 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 Matrix Service Co 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 Matrix Service i.e., Matrix Service and IES Holdings go up and down completely randomly.
Pair Corralation between Matrix Service and IES Holdings
Given the investment horizon of 90 days Matrix Service is expected to generate 1.19 times less return on investment than IES Holdings. But when comparing it to its historical volatility, Matrix Service Co is 2.47 times less risky than IES Holdings. It trades about 0.21 of its potential returns per unit of risk. IES Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22,104 in IES Holdings on November 9, 2024 and sell it today you would earn a total of 2,106 from holding IES Holdings or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matrix Service Co vs. IES Holdings
Performance |
| Timeline |
| Matrix Service |
| IES Holdings |
Matrix Service and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matrix Service and IES Holdings
The main advantage of trading using opposite Matrix Service and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matrix Service 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.| Matrix Service vs. EMCOR Group | Matrix Service vs. Comfort Systems USA | Matrix Service vs. Primoris Services | Matrix Service vs. Granite Construction Incorporated |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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