Correlation Between IES Holdings and Beeio Honey

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

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

Diversification Opportunities for IES Holdings and Beeio Honey

-0.84

Correlation Coefficient

IES Holdings  Beeio Honey

Pay attention - limited upside

The 3 months correlation between IES and Beeio is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding IES Holdings and Beeio Honey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeio Honey and IES 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 IES Holdings are associated (or correlated) with Beeio Honey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeio Honey has no effect on the direction of IES Holdings i.e., IES Holdings and Beeio Honey go up and down completely randomly.

Pair Corralation between IES Holdings and Beeio Honey

Assuming the 90 days trading horizon IES Holdings is expected to generate 0.21 times more return on investment than Beeio Honey. However, IES Holdings is 4.74 times less risky than Beeio Honey. It trades about 0.26 of its potential returns per unit of risk. Beeio Honey is currently generating about -0.03 per unit of risk. If you would invest  2,011,000  in IES Holdings on September 29, 2024 and sell it today you would earn a total of  489,000  from holding IES Holdings or generate 24.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

IES Holdings  vs.  Beeio Honey

IES Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IES Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IES Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Beeio Honey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beeio Honey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with IES Holdings and Beeio Honey

The main advantage of trading using opposite IES Holdings and Beeio Honey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IES Holdings position performs unexpectedly, Beeio Honey 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 Beeio Honey will offset losses from the drop in Beeio Honey's long position.

The idea behind IES Holdings and Beeio Honey 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.