Correlation Between Goosehead Insurance and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Goosehead Insurance and Safety 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 Safety 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 Safety Insurance Group, you can compare the effects of market volatilities on Goosehead Insurance and Safety 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goosehead Insurance and Safety Insurance.
Diversification Opportunities for Goosehead Insurance and Safety Insurance
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goosehead and Safety is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and Safety Insurance go up and down completely randomly.
Pair Corralation between Goosehead Insurance and Safety Insurance
Assuming the 90 days trading horizon Goosehead Insurance is expected to generate 1.27 times more return on investment than Safety Insurance. However, Goosehead Insurance is 1.27 times more volatile than Safety Insurance Group. It trades about 0.31 of its potential returns per unit of risk. Safety Insurance Group is currently generating about 0.32 per unit of risk. If you would invest 10,090 in Goosehead Insurance on August 27, 2024 and sell it today you would earn a total of 1,570 from holding Goosehead Insurance or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goosehead Insurance vs. Safety Insurance Group
Performance |
| Timeline |
| Goosehead Insurance |
| Safety Insurance |
Goosehead Insurance and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goosehead Insurance and Safety Insurance
The main advantage of trading using opposite Goosehead Insurance and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goosehead Insurance position performs unexpectedly, Safety 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc | Goosehead Insurance vs. Apple Inc |
| Safety Insurance vs. COMPUTERSHARE | Safety Insurance vs. JJ SNACK FOODS | Safety Insurance vs. Performance Food Group | Safety Insurance vs. Iridium Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |