Correlation Between Geospace Technologies and NOV
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and NOV 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 NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and NOV Inc, you can compare the effects of market volatilities on Geospace Technologies and NOV 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 NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and NOV.
Diversification Opportunities for Geospace Technologies and NOV
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geospace and NOV is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc 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 NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and NOV go up and down completely randomly.
Pair Corralation between Geospace Technologies and NOV
Given the investment horizon of 90 days Geospace Technologies is expected to under-perform the NOV. In addition to that, Geospace Technologies is 1.63 times more volatile than NOV Inc. It trades about -0.04 of its total potential returns per unit of risk. NOV Inc is currently generating about -0.03 per unit of volatility. If you would invest 1,903 in NOV Inc on November 9, 2024 and sell it today you would lose (355.00) from holding NOV Inc or give up 18.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geospace Technologies vs. NOV Inc
Performance |
| Timeline |
| Geospace Technologies |
| NOV Inc |
Geospace Technologies and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and NOV
The main advantage of trading using opposite Geospace Technologies and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| Geospace Technologies vs. Enerflex | Geospace Technologies vs. Oil States International | Geospace Technologies vs. MRC Global | Geospace Technologies vs. North American Construction |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |