Correlation Between ChampionX and Geospace Technologies

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

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

Diversification Opportunities for ChampionX and Geospace Technologies

0.47

Correlation Coefficient

ChampionX  Geospace Technologies

Very weak diversification

The 3 months correlation between ChampionX and Geospace is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and ChampionX 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 ChampionX are associated (or correlated) with Geospace Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geospace Technologies has no effect on the direction of ChampionX i.e., ChampionX and Geospace Technologies go up and down completely randomly.

Pair Corralation between ChampionX and Geospace Technologies

Considering the 90-day investment horizon ChampionX is expected to generate 27.37 times less return on investment than Geospace Technologies. But when comparing it to its historical volatility, ChampionX is 5.63 times less risky than Geospace Technologies. It trades about 0.04 of its potential returns per unit of risk. Geospace Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  668.00  in Geospace Technologies on May 2, 2025 and sell it today you would earn a total of  953.00  from holding Geospace Technologies or generate 142.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	82.26%
Values	Daily Returns

ChampionX  vs.  Geospace Technologies

ChampionX

Risk-Adjusted Performance

Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Geospace Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Geospace Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Geospace Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChampionX and Geospace Technologies

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

The idea behind ChampionX and Geospace Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.