Correlation Between Geospace Technologies and CES Energy
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and CES Energy 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 CES Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and CES Energy Solutions, you can compare the effects of market volatilities on Geospace Technologies and CES Energy 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 CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and CES Energy.
Diversification Opportunities for Geospace Technologies and CES Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geospace and CES is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and CES Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CES Energy Solutions 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 CES Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CES Energy Solutions has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and CES Energy go up and down completely randomly.
Pair Corralation between Geospace Technologies and CES Energy
Given the investment horizon of 90 days Geospace Technologies is expected to under-perform the CES Energy. In addition to that, Geospace Technologies is 1.85 times more volatile than CES Energy Solutions. It trades about -0.03 of its total potential returns per unit of risk. CES Energy Solutions is currently generating about 0.27 per unit of volatility. If you would invest 589.00 in CES Energy Solutions on September 4, 2024 and sell it today you would earn a total of 105.00 from holding CES Energy Solutions or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geospace Technologies vs. CES Energy Solutions
Performance |
| Timeline |
| Geospace Technologies |
| CES Energy Solutions |
Geospace Technologies and CES Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and CES Energy
The main advantage of trading using opposite Geospace Technologies and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, CES Energy 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 CES Energy will offset losses from the drop in CES Energy's long position.| Geospace Technologies vs. Enerflex | Geospace Technologies vs. Oil States International | Geospace Technologies vs. Newpark Resources | Geospace Technologies vs. MRC Global |
| CES Energy vs. Seadrill Limited | CES Energy vs. Noble plc | CES Energy vs. Borr Drilling | CES Energy vs. SCOR PK |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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