Correlation Between Wilhelmina and Geo

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

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

Diversification Opportunities for Wilhelmina and Geo

0.0

Correlation Coefficient

Wilhelmina  Geo

Pay attention - limited upside

The 3 months correlation between Wilhelmina and Geo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Wilhelmina 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 Wilhelmina 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 Wilhelmina i.e., Wilhelmina and Geo go up and down completely randomly.

Pair Corralation between Wilhelmina and Geo

If you would invest  2,754  in Geo Group on December 28, 2024 and sell it today you would earn a total of  286.00  from holding Geo Group or generate 10.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wilhelmina  vs.  Geo Group

Wilhelmina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Wilhelmina is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Geo Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilhelmina and Geo

The main advantage of trading using opposite Wilhelmina and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilhelmina 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 Wilhelmina 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.