Correlation Between International Consolidated and Geo

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

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

Diversification Opportunities for International Consolidated and Geo

-0.47

Correlation Coefficient

International Consolidated  Geo

Very good diversification

The 3 months correlation between International and Geo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Com and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and International Consolidated 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 International Consolidated Companies 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 International Consolidated i.e., International Consolidated and Geo go up and down completely randomly.

Pair Corralation between International Consolidated and Geo

Given the investment horizon of 90 days International Consolidated Companies is expected to generate 79.72 times more return on investment than Geo. However, International Consolidated is 79.72 times more volatile than Geo Group. It trades about 0.27 of its potential returns per unit of risk. Geo Group is currently generating about 0.07 per unit of risk. If you would invest  20.00  in International Consolidated Companies on September 26, 2024 and sell it today you would lose (17.57) from holding International Consolidated Companies or give up 87.85% of portfolio value over 90 days.

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

International Consolidated Com  vs.  Geo Group

International Consolidated

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Companies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with International Consolidated and Geo

The main advantage of trading using opposite International Consolidated and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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 International Consolidated Companies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.