Correlation Between Calfrac Well and Geospace Technologies
Can any of the company-specific risk be diversified away by investing in both Calfrac Well and Geospace Technologies 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 Calfrac Well and Geospace Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calfrac Well Services and Geospace Technologies, you can compare the effects of market volatilities on Calfrac Well and Geospace Technologies 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 Calfrac Well with a short position of Geospace Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Geospace Technologies.
Diversification Opportunities for Calfrac Well and Geospace Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Calfrac and Geospace is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and Calfrac Well 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 Calfrac Well Services are associated (or correlated) with Geospace Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geospace Technologies has no effect on the direction of Calfrac Well i.e., Calfrac Well and Geospace Technologies go up and down completely randomly.
Pair Corralation between Calfrac Well and Geospace Technologies
Assuming the 90 days horizon Calfrac Well Services is expected to generate 2.64 times more return on investment than Geospace Technologies. However, Calfrac Well is 2.64 times more volatile than Geospace Technologies. It trades about 0.03 of its potential returns per unit of risk. Geospace Technologies is currently generating about -0.05 per unit of risk. If you would invest 274.00 in Calfrac Well Services on October 20, 2024 and sell it today you would earn a total of 3.00 from holding Calfrac Well Services or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. Geospace Technologies
Performance |
| Timeline |
| Calfrac Well Services |
| Geospace Technologies |
Calfrac Well and Geospace Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and Geospace Technologies
The main advantage of trading using opposite Calfrac Well and Geospace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, Geospace Technologies 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 Geospace Technologies will offset losses from the drop in Geospace Technologies' long position.| Calfrac Well vs. Greenway Technologies | Calfrac Well vs. Akastor ASA | Calfrac Well vs. Auri Inc | Calfrac Well vs. Us Energy Initiative |
| Geospace Technologies vs. Enerflex | Geospace Technologies vs. Oil States International | Geospace Technologies vs. MRC Global | Geospace Technologies vs. North American Construction |
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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