Correlation Between Superior Plus and GEO
Can any of the company-specific risk be diversified away by investing in both Superior Plus and GEO 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 Superior Plus and GEO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and The GEO Group, you can compare the effects of market volatilities on Superior Plus and GEO 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 Superior Plus with a short position of GEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and GEO.
Diversification Opportunities for Superior Plus and GEO
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and GEO is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and The GEO Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO Group and Superior Plus 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 Superior Plus Corp are associated (or correlated) with GEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO Group has no effect on the direction of Superior Plus i.e., Superior Plus and GEO go up and down completely randomly.
Pair Corralation between Superior Plus and GEO
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the GEO. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.65 times less risky than GEO. The stock trades about -0.02 of its potential returns per unit of risk. The The GEO Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,122 in The GEO Group on September 1, 2024 and sell it today you would earn a total of 1,534 from holding The GEO Group or generate 136.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. The GEO Group
Performance |
| Timeline |
| Superior Plus Corp |
| GEO Group |
Superior Plus and GEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and GEO
The main advantage of trading using opposite Superior Plus and GEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, GEO 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 GEO will offset losses from the drop in GEO's long position.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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