Correlation Between Bristow and Geospace Technologies

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

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

Diversification Opportunities for Bristow and Geospace Technologies

-0.81

Correlation Coefficient

Bristow  Geospace Technologies

Pay attention - limited upside

The 3 months correlation between Bristow and Geospace is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Geospace Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geospace Technologies and Bristow 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 Bristow Group 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 Bristow i.e., Bristow and Geospace Technologies go up and down completely randomly.

Pair Corralation between Bristow and Geospace Technologies

Given the investment horizon of 90 days Bristow Group is expected to generate 0.65 times more return on investment than Geospace Technologies. However, Bristow Group is 1.54 times less risky than Geospace Technologies. It trades about 0.16 of its potential returns per unit of risk. Geospace Technologies is currently generating about -0.05 per unit of risk. If you would invest  2,566  in Bristow Group on March 10, 2024 and sell it today you would earn a total of  684.00  from holding Bristow Group or generate 26.66% return on investment over 90 days.

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

Bristow Group  vs.  Geospace Technologies

Bristow Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Bristow disclosed solid returns over the last few months and may actually be approaching a breakup point.

Geospace Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geospace Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bristow and Geospace Technologies

The main advantage of trading using opposite Bristow and Geospace Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow 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 Bristow Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.