Correlation Between FIRST SHIP and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP 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 FIRST SHIP and Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and Goosehead Insurance, you can compare the effects of market volatilities on FIRST SHIP 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 FIRST SHIP with a short position of Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and Goosehead Insurance.
Diversification Opportunities for FIRST SHIP and Goosehead Insurance
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and Goosehead is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance and FIRST SHIP 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 FIRST SHIP LEASE 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 FIRST SHIP i.e., FIRST SHIP and Goosehead Insurance go up and down completely randomly.
Pair Corralation between FIRST SHIP and Goosehead Insurance
Assuming the 90 days horizon FIRST SHIP LEASE is expected to under-perform the Goosehead Insurance. But the stock apears to be less risky and, when comparing its historical volatility, FIRST SHIP LEASE is 1.8 times less risky than Goosehead Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Goosehead Insurance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,756 in Goosehead Insurance on November 6, 2024 and sell it today you would earn a total of 379.00 from holding Goosehead Insurance or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. Goosehead Insurance
Performance |
| Timeline |
| FIRST SHIP LEASE |
| Goosehead Insurance |
FIRST SHIP and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and Goosehead Insurance
The main advantage of trading using opposite FIRST SHIP and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP 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.| FIRST SHIP vs. CODERE ONLINE LUX | FIRST SHIP vs. BOS BETTER ONLINE | FIRST SHIP vs. Salesforce | FIRST SHIP vs. Columbia Sportswear |
| Goosehead Insurance vs. Tower One Wireless | Goosehead Insurance vs. Corporate Office Properties | Goosehead Insurance vs. AGNC INVESTMENT | Goosehead Insurance vs. Gaming and Leisure |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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