Correlation Between International General and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both International General and Goosehead 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 International General and Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International General Insurance and Goosehead Insurance, you can compare the effects of market volatilities on International General and Goosehead 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 International General with a short position of Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of International General and Goosehead Insurance.
Diversification Opportunities for International General and Goosehead Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Goosehead is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance and International General 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 International General Insurance are associated (or correlated) with Goosehead Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goosehead Insurance has no effect on the direction of International General i.e., International General and Goosehead Insurance go up and down completely randomly.
Pair Corralation between International General and Goosehead Insurance
If you would invest 10,949 in Goosehead Insurance on August 28, 2024 and sell it today you would earn a total of 1,634 from holding Goosehead Insurance or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
International General Insuranc vs. Goosehead Insurance
Performance |
| Timeline |
| International General |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Goosehead Insurance |
International General and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International General and Goosehead Insurance
The main advantage of trading using opposite International General and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General position performs unexpectedly, Goosehead 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 Goosehead Insurance will offset losses from the drop in Goosehead Insurance's long position.The idea behind International General Insurance and Goosehead Insurance 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.| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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