Correlation Between GEO and PARKWAY LIFE
Can any of the company-specific risk be diversified away by investing in both GEO and PARKWAY LIFE 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 GEO and PARKWAY LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The GEO Group and PARKWAY LIFE REAL, you can compare the effects of market volatilities on GEO and PARKWAY LIFE 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 GEO with a short position of PARKWAY LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEO and PARKWAY LIFE.
Diversification Opportunities for GEO and PARKWAY LIFE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GEO and PARKWAY is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The GEO Group and PARKWAY LIFE REAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKWAY LIFE REAL and GEO 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 The GEO Group are associated (or correlated) with PARKWAY LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKWAY LIFE REAL has no effect on the direction of GEO i.e., GEO and PARKWAY LIFE go up and down completely randomly.
Pair Corralation between GEO and PARKWAY LIFE
Assuming the 90 days horizon The GEO Group is expected to generate 3.42 times more return on investment than PARKWAY LIFE. However, GEO is 3.42 times more volatile than PARKWAY LIFE REAL. It trades about 0.29 of its potential returns per unit of risk. PARKWAY LIFE REAL is currently generating about -0.08 per unit of risk. If you would invest 1,154 in The GEO Group on August 29, 2024 and sell it today you would earn a total of 1,483 from holding The GEO Group or generate 128.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The GEO Group vs. PARKWAY LIFE REAL
Performance |
| Timeline |
| GEO Group |
| PARKWAY LIFE REAL |
GEO and PARKWAY LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEO and PARKWAY LIFE
The main advantage of trading using opposite GEO and PARKWAY LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEO position performs unexpectedly, PARKWAY LIFE 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 PARKWAY LIFE will offset losses from the drop in PARKWAY LIFE's long position.| GEO vs. Sabra Health Care | GEO vs. Superior Plus Corp | GEO vs. NMI Holdings | GEO vs. SIVERS SEMICONDUCTORS AB |
| PARKWAY LIFE vs. Nippon Steel | PARKWAY LIFE vs. ANGI Homeservices | PARKWAY LIFE vs. ABO GROUP ENVIRONMENT | PARKWAY LIFE vs. MITSUBISHI STEEL MFG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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