Correlation Between CompX International and Geo
Can any of the company-specific risk be diversified away by investing in both CompX International 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 CompX International and Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompX International and Geo Group, you can compare the effects of market volatilities on CompX International 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 CompX International with a short position of Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and Geo.
Diversification Opportunities for CompX International and Geo
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CompX and Geo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and CompX International 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 CompX International 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 CompX International i.e., CompX International and Geo go up and down completely randomly.
Pair Corralation between CompX International and Geo
Considering the 90-day investment horizon CompX International is expected to generate 1.91 times less return on investment than Geo. In addition to that, CompX International is 1.34 times more volatile than Geo Group. It trades about 0.05 of its total potential returns per unit of risk. Geo Group is currently generating about 0.12 per unit of volatility. If you would invest 761.00 in Geo Group on August 31, 2024 and sell it today you would earn a total of 2,090 from holding Geo Group or generate 274.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompX International vs. Geo Group
Performance |
| Timeline |
| CompX International |
| Geo Group |
CompX International and Geo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompX International and Geo
The main advantage of trading using opposite CompX International and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International 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.| CompX International vs. NL Industries | CompX International vs. Eastern Co | CompX International vs. CF Financial | CompX International vs. Bar Harbor Bankshares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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