Correlation Between Goosehead Insurance and Ping An
Can any of the company-specific risk be diversified away by investing in both Goosehead Insurance and Ping An 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 Goosehead Insurance and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goosehead Insurance and Ping An Insurance, you can compare the effects of market volatilities on Goosehead Insurance and Ping An 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 Goosehead Insurance with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goosehead Insurance and Ping An.
Diversification Opportunities for Goosehead Insurance and Ping An
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goosehead and Ping is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance and Goosehead Insurance 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 Goosehead Insurance are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and Ping An go up and down completely randomly.
Pair Corralation between Goosehead Insurance and Ping An
Assuming the 90 days trading horizon Goosehead Insurance is expected to generate 0.75 times more return on investment than Ping An. However, Goosehead Insurance is 1.34 times less risky than Ping An. It trades about 0.3 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.09 per unit of risk. If you would invest 9,938 in Goosehead Insurance on August 26, 2024 and sell it today you would earn a total of 1,387 from holding Goosehead Insurance or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goosehead Insurance vs. Ping An Insurance
Performance |
| Timeline |
| Goosehead Insurance |
| Ping An Insurance |
Goosehead Insurance and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goosehead Insurance and Ping An
The main advantage of trading using opposite Goosehead Insurance and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goosehead Insurance position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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