Correlation Between Concrete Pumping and IES Holdings

Can any of the company-specific risk be diversified away by investing in both Concrete Pumping 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 Concrete Pumping and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Concrete Pumping Holdings and IES Holdings, you can compare the effects of market volatilities on Concrete Pumping 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 Concrete Pumping with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concrete Pumping and IES Holdings.

Diversification Opportunities for Concrete Pumping and IES Holdings

-0.61

Correlation Coefficient

Concrete Pumping  IES Holdings

Excellent diversification

The 3 months correlation between Concrete and IES is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Concrete Pumping Holdings and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Concrete Pumping 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 Concrete Pumping 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 Concrete Pumping i.e., Concrete Pumping and IES Holdings go up and down completely randomly.

Pair Corralation between Concrete Pumping and IES Holdings

If you would invest  14,879  in IES Holdings on September 5, 2024 and sell it today you would earn a total of  14,701  from holding IES Holdings or generate 98.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Concrete Pumping Holdings  vs.  IES Holdings

Concrete Pumping Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concrete Pumping Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concrete Pumping is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

IES Holdings

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IES Holdings are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, IES Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concrete Pumping and IES Holdings

The main advantage of trading using opposite Concrete Pumping and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concrete Pumping 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.

The idea behind Concrete Pumping Holdings and IES Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.