Correlation Between Goosehead Insurance and IMAC Holdings
Can any of the company-specific risk be diversified away by investing in both Goosehead Insurance and IMAC Holdings 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 IMAC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goosehead Insurance and IMAC Holdings, you can compare the effects of market volatilities on Goosehead Insurance and IMAC Holdings 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 IMAC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goosehead Insurance and IMAC Holdings.
Diversification Opportunities for Goosehead Insurance and IMAC Holdings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goosehead and IMAC is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and IMAC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMAC Holdings 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 IMAC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMAC Holdings has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and IMAC Holdings go up and down completely randomly.
Pair Corralation between Goosehead Insurance and IMAC Holdings
Given the investment horizon of 90 days Goosehead Insurance is expected to generate 0.45 times more return on investment than IMAC Holdings. However, Goosehead Insurance is 2.22 times less risky than IMAC Holdings. It trades about 0.45 of its potential returns per unit of risk. IMAC Holdings is currently generating about -0.17 per unit of risk. If you would invest 10,949 in Goosehead Insurance on August 29, 2024 and sell it today you would earn a total of 2,020 from holding Goosehead Insurance or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goosehead Insurance vs. IMAC Holdings
Performance |
| Timeline |
| Goosehead Insurance |
| IMAC Holdings |
Goosehead Insurance and IMAC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goosehead Insurance and IMAC Holdings
The main advantage of trading using opposite Goosehead Insurance and IMAC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goosehead Insurance position performs unexpectedly, IMAC Holdings 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 IMAC Holdings will offset losses from the drop in IMAC Holdings' long position.| Goosehead Insurance vs. Enstar Group Limited | Goosehead Insurance vs. Waterdrop ADR | Goosehead Insurance vs. Axa Equitable Holdings | Goosehead Insurance vs. Hartford Financial Services |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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