Correlation Between Geo Energy and Exxaro Resources
Can any of the company-specific risk be diversified away by investing in both Geo Energy and Exxaro Resources 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 Geo Energy and Exxaro Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geo Energy Resources and Exxaro Resources Limited, you can compare the effects of market volatilities on Geo Energy and Exxaro Resources 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 Geo Energy with a short position of Exxaro Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geo Energy and Exxaro Resources.
Diversification Opportunities for Geo Energy and Exxaro Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geo and Exxaro is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Geo Energy Resources and Exxaro Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxaro Resources and Geo Energy 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 Geo Energy Resources are associated (or correlated) with Exxaro Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxaro Resources has no effect on the direction of Geo Energy i.e., Geo Energy and Exxaro Resources go up and down completely randomly.
Pair Corralation between Geo Energy and Exxaro Resources
If you would invest 21.00 in Geo Energy Resources on July 30, 2024 and sell it today you would earn a total of 0.00 from holding Geo Energy Resources or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 1.56% |
Values | Daily Returns |
Geo Energy Resources vs. Exxaro Resources Limited
Performance |
Timeline |
Geo Energy Resources |
Exxaro Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Geo Energy and Exxaro Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Geo Energy and Exxaro Resources
The main advantage of trading using opposite Geo Energy and Exxaro Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geo Energy position performs unexpectedly, Exxaro Resources 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 Exxaro Resources will offset losses from the drop in Exxaro Resources' long position.Geo Energy vs. Alliance Resource Partners | Geo Energy vs. SBM Offshore NV | Geo Energy vs. Everi Holdings | Geo Energy vs. Eagle Point Credit |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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