Correlation Between New Hope and Geo Energy

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Can any of the company-specific risk be diversified away by investing in both New Hope and Geo Energy 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 New Hope and Geo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Hope and Geo Energy Resources, you can compare the effects of market volatilities on New Hope and Geo Energy 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 New Hope with a short position of Geo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Geo Energy.

Diversification Opportunities for New Hope and Geo Energy

NewGeoDiversified AwayNewGeoDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between New and Geo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding New Hope and Geo Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Energy Resources and New Hope 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 New Hope are associated (or correlated) with Geo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geo Energy Resources has no effect on the direction of New Hope i.e., New Hope and Geo Energy go up and down completely randomly.

Pair Corralation between New Hope and Geo Energy

If you would invest  17.00  in Geo Energy Resources on November 27, 2024 and sell it today you would earn a total of  0.00  from holding Geo Energy Resources or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

New Hope  vs.  Geo Energy Resources

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15NHPEF GRYRF
       Timeline  
New Hope 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days New Hope has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.62.72.82.933.13.2
Geo Energy Resources 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Geo Energy Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Geo Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.170.180.190.20.210.22

New Hope and Geo Energy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.15-4.61-3.06-1.52-0.02461.422.94.375.847.32 0.0250.0300.035
JavaScript chart by amCharts 3.21.15NHPEF GRYRF
       Returns  

Pair Trading with New Hope and Geo Energy

The main advantage of trading using opposite New Hope and Geo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Geo Energy 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 Energy will offset losses from the drop in Geo Energy's long position.
The idea behind New Hope and Geo Energy Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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