Correlation Between Automatic Data and Geo
Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Geo Group, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Geo.
Diversification Opportunities for Automatic Data and Geo
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automatic and Geo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and Geo go up and down completely randomly.
Pair Corralation between Automatic Data and Geo
Considering the 90-day investment horizon Automatic Data Processing is expected to generate 0.49 times more return on investment than Geo. However, Automatic Data Processing is 2.03 times less risky than Geo. It trades about 0.05 of its potential returns per unit of risk. Geo Group is currently generating about -0.06 per unit of risk. If you would invest 29,385 in Automatic Data Processing on March 21, 2025 and sell it today you would earn a total of 1,292 from holding Automatic Data Processing or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Geo Group
Performance |
| Timeline |
| Automatic Data Processing |
| Geo Group |
Automatic Data and Geo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Geo
The main advantage of trading using opposite Automatic Data and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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.| Automatic Data vs. Robert Half International | Automatic Data vs. Barrett Business Services | Automatic Data vs. ManpowerGroup | Automatic Data vs. Kforce Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |