Installed Building Correlations

IBP Stock

USD 176.42 1.76 0.99%

The current 90-days correlation between Installed Building and Century Communities is 0.74 (i.e., Poor diversification). The correlation of Installed Building is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Installed Building Correlation With Market

Very weak diversification

The correlation between Installed Building Products and DJI is 0.49 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Installed Building Products and DJI in the same portfolio, assuming nothing else is changed.

Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in Installed Building Products. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of labor statistics.

Moving together with Installed Stock

0.61	UA	Under Armour C	Pair Corr
0.79	CCS	Century Communities	Pair Corr
0.68	HOV	Hovnanian Enterprises	Pair Corr
0.68	KBH	KB Home	Pair Corr
0.74	MTH	Meritage	Pair Corr
0.64	OXM	Oxford Industries	Pair Corr
0.75	TPH	TRI Pointe Homes	Pair Corr
0.67	LGIH	LGI Homes	Pair Corr
0.75	TMHC	Taylor Morn Home	Pair Corr
0.65	HD	Home Depot	Pair Corr
0.72	LOW	Lowes Companies	Pair Corr

Moving against Installed Stock

0.61	YUM	Yum Brands	Pair Corr
0.6	NATH	Nathans Famous	Pair Corr
0.57	MCD	McDonalds	Pair Corr
0.33	MELI	MercadoLibre Downward Rally	Pair Corr

Related Correlations Analysis

	CCS	MHO	TMHC	TPH	BZH	LGIH	MTH	SKY	LEGH	CVCO
CCS		0.7	0.71	0.84	0.64	0.86	0.81	-0.07	0.17	-0.09	CCS
MHO	0.7		0.37	0.81	0.93	0.85	0.79	-0.57	-0.33	-0.56	MHO
TMHC	0.71	0.37		0.55	0.33	0.58	0.77	0.05	0.2	-0.04	TMHC
TPH	0.84	0.81	0.55		0.77	0.94	0.8	-0.33	-0.03	-0.41	TPH
BZH	0.64	0.93	0.33	0.77		0.86	0.7	-0.46	-0.26	-0.56	BZH
LGIH	0.86	0.85	0.58	0.94	0.86		0.82	-0.31	-0.06	-0.43	LGIH
MTH	0.81	0.79	0.77	0.8	0.7	0.82		-0.37	-0.16	-0.38	MTH
SKY	-0.07	-0.57	0.05	-0.33	-0.46	-0.31	-0.37		0.71	0.88	SKY
LEGH	0.17	-0.33	0.2	-0.03	-0.26	-0.06	-0.16	0.71		0.71	LEGH
CVCO	-0.09	-0.56	-0.04	-0.41	-0.56	-0.43	-0.38	0.88	0.71		CVCO
	CCS	MHO	TMHC	TPH	BZH	LGIH	MTH	SKY	LEGH	CVCO

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

LGIH	+ 0.94	TPH
BZH	+ 0.93	MHO
CVCO	+ 0.88	SKY
LGIH	+ 0.86	CCS
LGIH	+ 0.86	BZH
LGIH	+ 0.85	MHO

High negative correlations

SKY	- 0.57	MHO
CVCO	- 0.56	BZH
CVCO	- 0.56	MHO
SKY	- 0.46	BZH
CVCO	- 0.43	LGIH
CVCO	- 0.41	TPH

Risk-Adjusted Indicators

There is a big difference between Installed Stock performing well and Installed Building Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Installed Building's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
CCS	1.69	(0.13)	0.00	(0.13)	0.00	0.00	4.10	(3.17)	8.95
MHO	1.60	(0.26)	0.00	(0.26)	0.00	0.00	3.22	(3.30)	10.34
TMHC	1.58	(0.06)	0.00	0.52	0.00	0.00	3.35	(3.11)	8.18
TPH	1.60	(0.16)	0.00	(0.16)	0.00	0.00	3.17	(3.08)	14.22
BZH	2.25	(0.36)	0.00	(0.22)	0.00	0.00	4.07	(3.54)	24.99
LGIH	1.94	(0.42)	0.00	(0.34)	0.00	0.00	3.32	(3.84)	10.51
MTH	1.67	(0.16)	0.00	0.72	0.00	0.00	3.79	(3.68)	8.89
SKY	1.83	0.16	0.09	0.10	1.57	(2.39)	3.62	(2.46)	16.82
LEGH	1.65	0.05	0.02	0.05	1.90	(1.68)	2.72	(2.67)	7.24
CVCO	1.48	0.29	0.20	0.24	1.23	(1.75)	3.59	(1.78)	9.62

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