Correlation Between Geospace Technologies and Kodiak Gas
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and Kodiak Gas 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 Kodiak Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and Kodiak Gas Services,, you can compare the effects of market volatilities on Geospace Technologies and Kodiak Gas 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 Kodiak Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and Kodiak Gas.
Diversification Opportunities for Geospace Technologies and Kodiak Gas
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geospace and Kodiak is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and Kodiak Gas Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Gas Services, 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 Kodiak Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Gas Services, has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and Kodiak Gas go up and down completely randomly.
Pair Corralation between Geospace Technologies and Kodiak Gas
Given the investment horizon of 90 days Geospace Technologies is expected to under-perform the Kodiak Gas. In addition to that, Geospace Technologies is 2.4 times more volatile than Kodiak Gas Services,. It trades about -0.04 of its total potential returns per unit of risk. Kodiak Gas Services, is currently generating about 0.53 per unit of volatility. If you would invest 3,120 in Kodiak Gas Services, on September 5, 2024 and sell it today you would earn a total of 929.00 from holding Kodiak Gas Services, or generate 29.78% 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. Kodiak Gas Services,
Performance |
| Timeline |
| Geospace Technologies |
| Kodiak Gas Services, |
Geospace Technologies and Kodiak Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and Kodiak Gas
The main advantage of trading using opposite Geospace Technologies and Kodiak Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, Kodiak Gas 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 Kodiak Gas will offset losses from the drop in Kodiak Gas' long position.| Geospace Technologies vs. Weatherford International PLC | Geospace Technologies vs. Enerflex | Geospace Technologies vs. RPC Inc | Geospace Technologies vs. Cactus Inc |
| Kodiak Gas vs. Weatherford International PLC | Kodiak Gas vs. Enerflex | Kodiak Gas vs. RPC Inc | Kodiak Gas vs. Cactus Inc |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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