Correlation Between ChampionX and Geospace Technologies
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Geospace Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Geospace Technologies, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Geospace Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Geospace Technologies.
Diversification Opportunities for ChampionX and Geospace Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ChampionX and Geospace is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Geospace Technologies go up and down completely randomly.
Pair Corralation between ChampionX and Geospace Technologies
Considering the 90-day investment horizon ChampionX is expected to generate 1.4 times more return on investment than Geospace Technologies. However, ChampionX is 1.4 times more volatile than Geospace Technologies. It trades about 0.54 of its potential returns per unit of risk. Geospace Technologies is currently generating about -0.05 per unit of risk. If you would invest 2,584 in ChampionX on October 20, 2024 and sell it today you would earn a total of 537.00 from holding ChampionX or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Geospace Technologies
Performance |
| Timeline |
| ChampionX |
| Geospace Technologies |
ChampionX and Geospace Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Geospace Technologies
The main advantage of trading using opposite ChampionX and Geospace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| 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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