Correlation Between Hashicorp and Geo

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

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

Diversification Opportunities for Hashicorp and Geo

0.15

Correlation Coefficient

Hashicorp  Geo

Average diversification

The 3 months correlation between Hashicorp and Geo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hashicorp and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Hashicorp 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 Hashicorp 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 Hashicorp i.e., Hashicorp and Geo go up and down completely randomly.

Pair Corralation between Hashicorp and Geo

Considering the 90-day investment horizon Hashicorp is expected to generate 2.03 times less return on investment than Geo. In addition to that, Hashicorp is 1.48 times more volatile than Geo Group. It trades about 0.02 of its total potential returns per unit of risk. Geo Group is currently generating about 0.07 per unit of volatility. If you would invest  669.00  in Geo Group on February 28, 2024 and sell it today you would earn a total of  723.00  from holding Geo Group or generate 108.07% return on investment over 90 days.

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

Hashicorp  vs.  Geo Group

Hashicorp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hashicorp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Hashicorp reported solid returns over the last few months and may actually be approaching a breakup point.

Geo Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hashicorp and Geo

The main advantage of trading using opposite Hashicorp and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hashicorp 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 Hashicorp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.