Correlation Between Geospace Technologies and Liberty Oilfield
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and Liberty Oilfield 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 Liberty Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and Liberty Oilfield Services, you can compare the effects of market volatilities on Geospace Technologies and Liberty Oilfield 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 Liberty Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and Liberty Oilfield.
Diversification Opportunities for Geospace Technologies and Liberty Oilfield
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geospace and Liberty is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and Liberty Oilfield Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Oilfield 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 Liberty Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Oilfield Services has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and Liberty Oilfield go up and down completely randomly.
Pair Corralation between Geospace Technologies and Liberty Oilfield
Given the investment horizon of 90 days Geospace Technologies is expected to generate 1.36 times more return on investment than Liberty Oilfield. However, Geospace Technologies is 1.36 times more volatile than Liberty Oilfield Services. It trades about 0.07 of its potential returns per unit of risk. Liberty Oilfield Services is currently generating about 0.03 per unit of risk. If you would invest 430.00 in Geospace Technologies on August 28, 2024 and sell it today you would earn a total of 654.00 from holding Geospace Technologies or generate 152.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geospace Technologies vs. Liberty Oilfield Services
Performance |
| Timeline |
| Geospace Technologies |
| Liberty Oilfield Services |
Geospace Technologies and Liberty Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and Liberty Oilfield
The main advantage of trading using opposite Geospace Technologies and Liberty Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, Liberty Oilfield 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 Liberty Oilfield will offset losses from the drop in Liberty Oilfield's long position.| Geospace Technologies vs. Enerflex | Geospace Technologies vs. Oil States International | Geospace Technologies vs. Newpark Resources | Geospace Technologies vs. MRC Global |
| Liberty Oilfield vs. Ranger Energy Services | Liberty Oilfield vs. ProFrac Holding Corp | Liberty Oilfield vs. Archrock | Liberty Oilfield 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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