Correlation Between Zumtobel Group and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both Zumtobel Group 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 Zumtobel Group and Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zumtobel Group AG and Goosehead Insurance, you can compare the effects of market volatilities on Zumtobel Group 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 Zumtobel Group with a short position of Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumtobel Group and Goosehead Insurance.
Diversification Opportunities for Zumtobel Group and Goosehead Insurance
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zumtobel and Goosehead is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zumtobel Group AG and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance and Zumtobel Group 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 Zumtobel Group AG 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 Zumtobel Group i.e., Zumtobel Group and Goosehead Insurance go up and down completely randomly.
Pair Corralation between Zumtobel Group and Goosehead Insurance
Assuming the 90 days horizon Zumtobel Group AG is expected to under-perform the Goosehead Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Zumtobel Group AG is 1.27 times less risky than Goosehead Insurance. The stock trades about -0.13 of its potential returns per unit of risk. The Goosehead Insurance is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 9,756 in Goosehead Insurance on September 4, 2024 and sell it today you would earn a total of 2,179 from holding Goosehead Insurance or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zumtobel Group AG vs. Goosehead Insurance
Performance |
| Timeline |
| Zumtobel Group AG |
| Goosehead Insurance |
Zumtobel Group and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zumtobel Group and Goosehead Insurance
The main advantage of trading using opposite Zumtobel Group and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumtobel Group 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.| Zumtobel Group vs. Goosehead Insurance | Zumtobel Group vs. Reinsurance Group of | Zumtobel Group vs. Harmony Gold Mining | Zumtobel Group vs. Safety Insurance Group |
| Goosehead Insurance vs. Autohome ADR | Goosehead Insurance vs. GREENX METALS LTD | Goosehead Insurance vs. LGI Homes | Goosehead Insurance vs. Evolution Mining Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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