Correlation Between Geospace Technologies and ProPetro Holding
Can any of the company-specific risk be diversified away by investing in both Geospace Technologies and ProPetro Holding 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 ProPetro Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geospace Technologies and ProPetro Holding Corp, you can compare the effects of market volatilities on Geospace Technologies and ProPetro Holding 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 ProPetro Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geospace Technologies and ProPetro Holding.
Diversification Opportunities for Geospace Technologies and ProPetro Holding
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Geospace and ProPetro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and ProPetro Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPetro Holding Corp 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 ProPetro Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPetro Holding Corp has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and ProPetro Holding go up and down completely randomly.
Pair Corralation between Geospace Technologies and ProPetro Holding
Given the investment horizon of 90 days Geospace Technologies is expected to under-perform the ProPetro Holding. In addition to that, Geospace Technologies is 1.13 times more volatile than ProPetro Holding Corp. It trades about -0.02 of its total potential returns per unit of risk. ProPetro Holding Corp is currently generating about 0.13 per unit of volatility. If you would invest 756.00 in ProPetro Holding Corp on August 28, 2024 and sell it today you would earn a total of 89.00 from holding ProPetro Holding Corp or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geospace Technologies vs. ProPetro Holding Corp
Performance |
| Timeline |
| Geospace Technologies |
| ProPetro Holding Corp |
Geospace Technologies and ProPetro Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geospace Technologies and ProPetro Holding
The main advantage of trading using opposite Geospace Technologies and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geospace Technologies position performs unexpectedly, ProPetro Holding 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 ProPetro Holding will offset losses from the drop in ProPetro Holding'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 |
| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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