Correlation Between TGS ASA and Geospace Technologies

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

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

Diversification Opportunities for TGS ASA and Geospace Technologies

-0.36

Correlation Coefficient

TGS ASA  Geospace Technologies

Very good diversification

The 3 months correlation between TGS and Geospace is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TGS ASA and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and TGS ASA 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 TGS ASA 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 TGS ASA i.e., TGS ASA and Geospace Technologies go up and down completely randomly.

Pair Corralation between TGS ASA and Geospace Technologies

Assuming the 90 days horizon TGS ASA is expected to under-perform the Geospace Technologies. But the otc stock apears to be less risky and, when comparing its historical volatility, TGS ASA is 3.35 times less risky than Geospace Technologies. The otc stock trades about -0.04 of its potential returns per unit of risk. The Geospace Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  588.00  in Geospace Technologies on May 26, 2025 and sell it today you would earn a total of  1,361  from holding Geospace Technologies or generate 231.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

TGS ASA  vs.  Geospace Technologies

TGS ASA

Risk-Adjusted Performance

Weakest

Over the last 90 days TGS ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Geospace Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geospace Technologies are ranked lower than 17 (%) 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 TGS ASA and Geospace Technologies

The main advantage of trading using opposite TGS ASA and Geospace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGS ASA 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 TGS ASA 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.