Correlation Between Geo Energy and Hallador Energy

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

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

Diversification Opportunities for Geo Energy and Hallador Energy

0.17

Correlation Coefficient

Geo Energy  Hallador Energy

Average diversification

The 3 months correlation between Geo and Hallador is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Geo Energy Resources and Hallador Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hallador Energy and Geo Energy 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 Energy Resources are associated (or correlated) with Hallador Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hallador Energy has no effect on the direction of Geo Energy i.e., Geo Energy and Hallador Energy go up and down completely randomly.

Pair Corralation between Geo Energy and Hallador Energy

If you would invest  949.00  in Hallador Energy on November 28, 2024 and sell it today you would earn a total of  18.00  from holding Hallador Energy or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Geo Energy Resources  vs.  Hallador Energy

Geo Energy Resources

Risk-Adjusted Performance

Very Weak

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.

Hallador Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hallador Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Geo Energy and Hallador Energy

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

The idea behind Geo Energy Resources and Hallador Energy 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.