Correlation Between HEIA and GEO
Can any of the company-specific risk be diversified away by investing in both HEIA and GEO 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 HEIA and GEO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEIA and The GEO Group, you can compare the effects of market volatilities on HEIA and GEO 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 HEIA with a short position of GEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEIA and GEO.
Diversification Opportunities for HEIA and GEO
Very poor diversification
The 3 months correlation between HEIA and GEO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HEIA and The GEO Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO Group and HEIA 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 HEIA are associated (or correlated) with GEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO Group has no effect on the direction of HEIA i.e., HEIA and GEO go up and down completely randomly.
Pair Corralation between HEIA and GEO
If you would invest 1,135 in The GEO Group on August 25, 2024 and sell it today you would earn a total of 1,607 from holding The GEO Group or generate 141.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.22% |
| Values | Daily Returns |
HEIA vs. The GEO Group
Performance |
| Timeline |
| HEIA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| GEO Group |
HEIA and GEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEIA and GEO
The main advantage of trading using opposite HEIA and GEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEIA position performs unexpectedly, GEO 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 GEO will offset losses from the drop in GEO's long position.| HEIA vs. PT Bank Maybank | HEIA vs. National Bank Holdings | HEIA vs. OAKTRSPECLENDNEW | HEIA vs. The Hanover Insurance |
| GEO vs. Welltower | GEO vs. Medical Properties Trust | GEO vs. Sabra Health Care | GEO vs. National Health Investors |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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