Correlation Between Franklin Covey and Geo

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

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

Diversification Opportunities for Franklin Covey and Geo

-0.76

Correlation Coefficient

Franklin Covey  Geo

Pay attention - limited upside

The 3 months correlation between Franklin and Geo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and Geo go up and down completely randomly.

Pair Corralation between Franklin Covey and Geo

Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Geo. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 2.32 times less risky than Geo. The stock trades about -0.04 of its potential returns per unit of risk. The Geo Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,321  in Geo Group on September 2, 2024 and sell it today you would earn a total of  1,530  from holding Geo Group or generate 115.82% return on investment over 90 days.

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

Franklin Covey  vs.  Geo Group

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Geo Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Covey and Geo

The main advantage of trading using opposite Franklin Covey and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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 Franklin Covey 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.