Correlation Between Geospace Technologies and Enerflex

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

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

Diversification Opportunities for Geospace Technologies and Enerflex

0.5

Correlation Coefficient

Geospace Technologies  Enerflex

Very weak diversification

The 3 months correlation between Geospace and Enerflex is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Geospace Technologies and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Geospace Technologies 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 Geospace Technologies are associated (or correlated) with Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Geospace Technologies i.e., Geospace Technologies and Enerflex go up and down completely randomly.

Pair Corralation between Geospace Technologies and Enerflex

Given the investment horizon of 90 days Geospace Technologies is expected to generate 1.65 times more return on investment than Enerflex. However, Geospace Technologies is 1.65 times more volatile than Enerflex. It trades about 0.05 of its potential returns per unit of risk. Enerflex is currently generating about 0.02 per unit of risk. If you would invest  797.00  in Geospace Technologies on April 1, 2025 and sell it today you would earn a total of  792.00  from holding Geospace Technologies or generate 99.37% return on investment over 90 days.

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

Geospace Technologies  vs.  Enerflex

Geospace Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Geospace Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Geospace Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Enerflex

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enerflex is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Geospace Technologies and Enerflex

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

The idea behind Geospace Technologies and Enerflex 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.