Correlation Between BloomZ Ordinary and Geo

Can any of the company-specific risk be diversified away by investing in both BloomZ Ordinary 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 BloomZ Ordinary and Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BloomZ Ordinary Shares and Geo Group, you can compare the effects of market volatilities on BloomZ Ordinary 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 BloomZ Ordinary with a short position of Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of BloomZ Ordinary and Geo.

Diversification Opportunities for BloomZ Ordinary and Geo

-0.76

Correlation Coefficient

BloomZ Ordinary  Geo

Pay attention - limited upside

The 3 months correlation between BloomZ and Geo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BloomZ Ordinary Shares and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and BloomZ Ordinary 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 BloomZ Ordinary Shares 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 BloomZ Ordinary i.e., BloomZ Ordinary and Geo go up and down completely randomly.

Pair Corralation between BloomZ Ordinary and Geo

Given the investment horizon of 90 days BloomZ Ordinary Shares is expected to under-perform the Geo. In addition to that, BloomZ Ordinary is 5.02 times more volatile than Geo Group. It trades about -0.01 of its total potential returns per unit of risk. Geo Group is currently generating about 0.08 per unit of volatility. If you would invest  1,144  in Geo Group on October 11, 2024 and sell it today you would earn a total of  1,963  from holding Geo Group or generate 171.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	23.79%
Values	Daily Returns

BloomZ Ordinary Shares  vs.  Geo Group

BloomZ Ordinary Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BloomZ Ordinary Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Geo Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BloomZ Ordinary and Geo

The main advantage of trading using opposite BloomZ Ordinary and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BloomZ Ordinary 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.

The idea behind BloomZ Ordinary Shares and Geo Group 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.