Correlation Between Geo and YXTCOM GROUP

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

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

Diversification Opportunities for Geo and YXTCOM GROUP

-0.43

Correlation Coefficient

Geo  YXTCOM GROUP

Very good diversification

The 3 months correlation between Geo and YXTCOM is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Geo Group and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING and Geo 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 Geo Group are associated (or correlated) with YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of Geo i.e., Geo and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between Geo and YXTCOM GROUP

Considering the 90-day investment horizon Geo Group is expected to generate 0.37 times more return on investment than YXTCOM GROUP. However, Geo Group is 2.73 times less risky than YXTCOM GROUP. It trades about 0.07 of its potential returns per unit of risk. YXTCOM GROUP HOLDING is currently generating about -0.12 per unit of risk. If you would invest  1,070  in Geo Group on September 26, 2024 and sell it today you would earn a total of  1,731  from holding Geo Group or generate 161.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	18.35%
Values	Daily Returns

Geo Group  vs.  YXTCOM GROUP HOLDING

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 unsteady technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YXTCOM GROUP HOLDING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Geo and YXTCOM GROUP

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

The idea behind Geo Group and YXTCOM GROUP HOLDING 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.