Correlation Between Simpson Manufacturing and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Simpson Manufacturing 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 Simpson Manufacturing and IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simpson Manufacturing and IES Holdings, you can compare the effects of market volatilities on Simpson Manufacturing 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 Simpson Manufacturing with a short position of IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simpson Manufacturing and IES Holdings.
Diversification Opportunities for Simpson Manufacturing and IES Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simpson and IES is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings and Simpson Manufacturing 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 Simpson Manufacturing 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 Simpson Manufacturing i.e., Simpson Manufacturing and IES Holdings go up and down completely randomly.
Pair Corralation between Simpson Manufacturing and IES Holdings
Considering the 90-day investment horizon Simpson Manufacturing is expected to under-perform the IES Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Simpson Manufacturing is 2.38 times less risky than IES Holdings. The stock trades about -0.16 of its potential returns per unit of risk. The IES Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35,584 in IES Holdings on August 27, 2025 and sell it today you would earn a total of 5,166 from holding IES Holdings or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simpson Manufacturing vs. IES Holdings
Performance |
| Timeline |
| Simpson Manufacturing |
| IES Holdings |
Simpson Manufacturing and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simpson Manufacturing and IES Holdings
The main advantage of trading using opposite Simpson Manufacturing and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simpson Manufacturing 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.| Simpson Manufacturing vs. Infinite Technology Corp | Simpson Manufacturing vs. Vishay Intertechnology | Simpson Manufacturing vs. BC Technology Group | Simpson Manufacturing vs. Newron Sport |
| IES Holdings vs. SIGNA Sports United | IES Holdings vs. British American Tobacco | IES Holdings vs. National Rural Utilities | IES Holdings vs. Naked Wines plc |
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.
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