Correlation Between Kanzhun and Geo

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Can any of the company-specific risk be diversified away by investing in both Kanzhun 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 Kanzhun and Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kanzhun Ltd ADR and Geo Group, you can compare the effects of market volatilities on Kanzhun 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 Kanzhun with a short position of Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and Geo.

Diversification Opportunities for Kanzhun and Geo

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kanzhun and Geo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Kanzhun 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 Kanzhun Ltd ADR 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 Kanzhun i.e., Kanzhun and Geo go up and down completely randomly.

Pair Corralation between Kanzhun and Geo

Allowing for the 90-day total investment horizon Kanzhun is expected to generate 3.6 times less return on investment than Geo. But when comparing it to its historical volatility, Kanzhun Ltd ADR is 1.18 times less risky than Geo. It trades about 0.14 of its potential returns per unit of risk. Geo Group is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  2,801  in Geo Group on October 23, 2024 and sell it today you would earn a total of  686.00  from holding Geo Group or generate 24.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Kanzhun Ltd ADR  vs.  Geo Group

 Performance 
       Timeline  
Kanzhun Ltd ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kanzhun Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kanzhun is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Geo Group 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

Kanzhun and Geo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kanzhun and Geo

The main advantage of trading using opposite Kanzhun and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun 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.
The idea behind Kanzhun Ltd ADR and Geo Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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