Correlation Between GEE and Caldwell Partners

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

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

Diversification Opportunities for GEE and Caldwell Partners

-0.27

Correlation Coefficient

GEE  Caldwell Partners

Very good diversification

The 3 months correlation between GEE and Caldwell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GEE Group and The Caldwell Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners and GEE 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 GEE Group are associated (or correlated) with Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of GEE i.e., GEE and Caldwell Partners go up and down completely randomly.

Pair Corralation between GEE and Caldwell Partners

Considering the 90-day investment horizon GEE is expected to generate 1.09 times less return on investment than Caldwell Partners. In addition to that, GEE is 1.52 times more volatile than The Caldwell Partners. It trades about 0.03 of its total potential returns per unit of risk. The Caldwell Partners is currently generating about 0.04 per unit of volatility. If you would invest  80.00  in The Caldwell Partners on October 22, 2024 and sell it today you would earn a total of  5.00  from holding The Caldwell Partners or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

GEE Group  vs.  The Caldwell Partners

GEE Group

Risk-Adjusted Performance

2 of 100

Weak

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

Caldwell Partners

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Caldwell Partners are ranked lower than 3 (%) 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.

Pair Trading with GEE and Caldwell Partners

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

The idea behind GEE Group and The Caldwell Partners 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.