Correlation Between Caldwell Partners and GEE

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

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

Diversification Opportunities for Caldwell Partners and GEE

-0.34

Correlation Coefficient

Caldwell Partners  GEE

Very good diversification

The 3 months correlation between Caldwell and GEE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Caldwell Partners and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and Caldwell Partners 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 The Caldwell Partners are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and GEE go up and down completely randomly.

Pair Corralation between Caldwell Partners and GEE

Assuming the 90 days horizon The Caldwell Partners is expected to generate 2.68 times more return on investment than GEE. However, Caldwell Partners is 2.68 times more volatile than GEE Group. It trades about 0.07 of its potential returns per unit of risk. GEE Group is currently generating about -0.06 per unit of risk. If you would invest  63.00  in The Caldwell Partners on October 7, 2024 and sell it today you would earn a total of  24.00  from holding The Caldwell Partners or generate 38.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Caldwell Partners  vs.  GEE Group

Caldwell Partners

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Caldwell Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Caldwell Partners may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GEE Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEE Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat 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.

Pair Trading with Caldwell Partners and GEE

The main advantage of trading using opposite Caldwell Partners and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caldwell Partners position performs unexpectedly, GEE 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 GEE will offset losses from the drop in GEE's long position.

The idea behind The Caldwell Partners and GEE 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 Global Correlations module to find global opportunities by holding instruments from different markets.