Correlation Between Enerflex and Geospace Technologies
Can any of the company-specific risk be diversified away by investing in both Enerflex 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 Enerflex and Geospace Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Geospace Technologies, you can compare the effects of market volatilities on Enerflex 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 Enerflex with a short position of Geospace Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Geospace Technologies.
Diversification Opportunities for Enerflex and Geospace Technologies
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enerflex and Geospace is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and Enerflex 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 Enerflex 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 Enerflex i.e., Enerflex and Geospace Technologies go up and down completely randomly.
Pair Corralation between Enerflex and Geospace Technologies
Given the investment horizon of 90 days Enerflex is expected to under-perform the Geospace Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Enerflex is 2.05 times less risky than Geospace Technologies. The stock trades about -0.28 of its potential returns per unit of risk. The Geospace Technologies is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 974.00 in Geospace Technologies on November 18, 2024 and sell it today you would lose (62.00) from holding Geospace Technologies or give up 6.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerflex vs. Geospace Technologies
Performance |
| Timeline |
| Enerflex |
| Geospace Technologies |
Enerflex and Geospace Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Geospace Technologies
The main advantage of trading using opposite Enerflex and Geospace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex 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.| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Forum Energy Technologies |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |