Correlation Between Geospace Technologies and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and Baker Hughes 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 Geospace Technologies and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and Baker Hughes Co, you can compare the effects of market volatilities on Geospace Technologies and Baker Hughes 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 Geospace Technologies with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and Baker Hughes.
Diversification Opportunities for Geospace Technologies and Baker Hughes
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Geospace and Baker is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Geospace Technologies 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 Geospace Technologies are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and Baker Hughes go up and down completely randomly.
Pair Corralation between Geospace Technologies and Baker Hughes
Given the investment horizon of 90 days Geospace Technologies is expected to generate 1.98 times more return on investment than Baker Hughes. However, Geospace Technologies is 1.98 times more volatile than Baker Hughes Co. It trades about 0.08 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.06 per unit of risk. If you would invest 440.00 in Geospace Technologies on August 23, 2024 and sell it today you would earn a total of 922.00 from holding Geospace Technologies or generate 209.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geospace Technologies vs. Baker Hughes Co
Performance |
| Timeline |
| Geospace Technologies |
| Baker Hughes |
Geospace Technologies and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and Baker Hughes
The main advantage of trading using opposite Geospace Technologies and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Geospace Technologies vs. Enerflex | Geospace Technologies vs. Oil States International | Geospace Technologies vs. Newpark Resources | Geospace Technologies vs. MRC Global |
| Baker Hughes vs. Bristow Group | Baker Hughes vs. RPC Inc | Baker Hughes vs. NOV Inc | Baker Hughes vs. Oceaneering International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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