Correlation Between Southland Holdings and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Southland Holdings 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 Southland Holdings and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and IES Holdings, you can compare the effects of market volatilities on Southland Holdings 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 Southland Holdings with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and IES Holdings.
Diversification Opportunities for Southland Holdings and IES Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southland and IES is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Southland 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 Southland Holdings 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 Southland Holdings i.e., Southland Holdings and IES Holdings go up and down completely randomly.
Pair Corralation between Southland Holdings and IES Holdings
Given the investment horizon of 90 days Southland Holdings is expected to generate 39.04 times less return on investment than IES Holdings. In addition to that, Southland Holdings is 2.44 times more volatile than IES Holdings. It trades about 0.0 of its total potential returns per unit of risk. IES Holdings is currently generating about 0.37 per unit of volatility. If you would invest 21,131 in IES Holdings on August 27, 2024 and sell it today you would earn a total of 6,837 from holding IES Holdings or generate 32.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. IES Holdings
Performance |
| Timeline |
| Southland Holdings |
| IES Holdings |
Southland Holdings and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and IES Holdings
The main advantage of trading using opposite Southland Holdings and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings 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.| Southland Holdings vs. Cedar Realty Trust | Southland Holdings vs. CECO Environmental Corp | Southland Holdings vs. National Vision Holdings | Southland Holdings vs. Simon Property Group |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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