Correlation Between Goosehead Insurance and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Goosehead Insurance and QBE Insurance 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 QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goosehead Insurance and QBE Insurance Group, you can compare the effects of market volatilities on Goosehead Insurance and QBE Insurance 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 QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goosehead Insurance and QBE Insurance.
Diversification Opportunities for Goosehead Insurance and QBE Insurance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goosehead and QBE is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group 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 QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and QBE Insurance go up and down completely randomly.
Pair Corralation between Goosehead Insurance and QBE Insurance
Assuming the 90 days trading horizon Goosehead Insurance is expected to generate 1.91 times more return on investment than QBE Insurance. However, Goosehead Insurance is 1.91 times more volatile than QBE Insurance Group. It trades about 0.3 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.3 per unit of risk. If you would invest 7,634 in Goosehead Insurance on August 28, 2024 and sell it today you would earn a total of 4,451 from holding Goosehead Insurance or generate 58.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goosehead Insurance vs. QBE Insurance Group
Performance |
| Timeline |
| Goosehead Insurance |
| QBE Insurance Group |
Goosehead Insurance and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goosehead Insurance and QBE Insurance
The main advantage of trading using opposite Goosehead Insurance and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goosehead Insurance position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc |
| QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech | QBE Insurance vs. SIVERS SEMICONDUCTORS AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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