Correlation Between Geospace Technologies and Enerflex
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and Enerflex 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 Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and Enerflex, you can compare the effects of market volatilities on Geospace Technologies and Enerflex 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 Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and Enerflex.
Diversification Opportunities for Geospace Technologies and Enerflex
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geospace and Enerflex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex 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 Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and Enerflex go up and down completely randomly.
Pair Corralation between Geospace Technologies and Enerflex
Given the investment horizon of 90 days Geospace Technologies is expected to generate 8.74 times less return on investment than Enerflex. In addition to that, Geospace Technologies is 1.31 times more volatile than Enerflex. It trades about 0.01 of its total potential returns per unit of risk. Enerflex is currently generating about 0.13 per unit of volatility. If you would invest 420.00 in Enerflex on August 27, 2024 and sell it today you would earn a total of 520.00 from holding Enerflex or generate 123.81% 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. Enerflex
Performance |
| Timeline |
| Geospace Technologies |
| Enerflex |
Geospace Technologies and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and Enerflex
The main advantage of trading using opposite Geospace Technologies and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, Enerflex 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 Enerflex will offset losses from the drop in Enerflex's long position.| Geospace Technologies vs. ProPetro Holding Corp | Geospace Technologies vs. RPC Inc | Geospace Technologies vs. MRC Global | Geospace Technologies vs. Expro Group Holdings |
| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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