Correlation Between British Amer and IES Holdings
Can any of the company-specific risk be diversified away by investing in both British Amer 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 British Amer and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and IES Holdings, you can compare the effects of market volatilities on British Amer 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 British Amer with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and IES Holdings.
Diversification Opportunities for British Amer and IES Holdings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between British and IES is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and British Amer 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 British American Tobacco 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 British Amer i.e., British Amer and IES Holdings go up and down completely randomly.
Pair Corralation between British Amer and IES Holdings
Considering the 90-day investment horizon British Amer is expected to generate 6.62 times less return on investment than IES Holdings. But when comparing it to its historical volatility, British American Tobacco is 3.33 times less risky than IES Holdings. It trades about 0.04 of its potential returns per unit of risk. IES Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 36,088 in IES Holdings on September 7, 2025 and sell it today you would earn a total of 6,774 from holding IES Holdings or generate 18.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. IES Holdings
Performance |
| Timeline |
| British American Tobacco |
| IES Holdings |
British Amer and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and IES Holdings
The main advantage of trading using opposite British Amer and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer 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.| British Amer vs. Where Food Comes | British Amer vs. Collins Foods Limited | British Amer vs. Sunny Optical Technology | British Amer vs. Sunlands Technology Group |
| IES Holdings vs. Burke Herbert Financial | IES Holdings vs. Chiba Bank Ltd | IES Holdings vs. Logansport Financial Corp | IES Holdings vs. EVO Transportation Energy |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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