Correlation Between LiCycle Holdings and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings 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 LiCycle Holdings and Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LiCycle Holdings Corp and Goosehead Insurance, you can compare the effects of market volatilities on LiCycle Holdings 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 LiCycle Holdings with a short position of Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Goosehead Insurance.
Diversification Opportunities for LiCycle Holdings and Goosehead Insurance
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LiCycle and Goosehead is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance and LiCycle Holdings 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 LiCycle Holdings Corp 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 LiCycle Holdings i.e., LiCycle Holdings and Goosehead Insurance go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Goosehead Insurance
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Goosehead Insurance. In addition to that, LiCycle Holdings is 3.05 times more volatile than Goosehead Insurance. It trades about -0.05 of its total potential returns per unit of risk. Goosehead Insurance is currently generating about 0.07 per unit of volatility. If you would invest 4,954 in Goosehead Insurance on November 27, 2024 and sell it today you would earn a total of 5,611 from holding Goosehead Insurance or generate 113.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Goosehead Insurance
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Goosehead Insurance |
LiCycle Holdings and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Goosehead Insurance
The main advantage of trading using opposite LiCycle Holdings and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings 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.| LiCycle Holdings vs. Casella Waste Systems | LiCycle Holdings vs. Perma Fix Environmental Svcs | LiCycle Holdings vs. Montrose Environmental Grp | LiCycle Holdings vs. LanzaTech Global |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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