Correlation Between Goosehead Insurance and International General

Can any of the company-specific risk be diversified away by investing in both Goosehead Insurance and International General 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 International General into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goosehead Insurance and International General Insurance, you can compare the effects of market volatilities on Goosehead Insurance and International General 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 International General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goosehead Insurance and International General.

Diversification Opportunities for Goosehead Insurance and International General

0.39

Correlation Coefficient

Goosehead Insurance  International General

Weak diversification

The 3 months correlation between Goosehead and International is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and International General Insuranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International General 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 International General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International General has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and International General go up and down completely randomly.

Pair Corralation between Goosehead Insurance and International General

If you would invest  8,378  in Goosehead Insurance on September 2, 2024 and sell it today you would earn a total of  4,234  from holding Goosehead Insurance or generate 50.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Goosehead Insurance  vs.  International General Insuranc

Goosehead Insurance

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goosehead Insurance are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical indicators, Goosehead Insurance exhibited solid returns over the last few months and may actually be approaching a breakup point.

International General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, International General is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goosehead Insurance and International General

The main advantage of trading using opposite Goosehead Insurance and International General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goosehead Insurance position performs unexpectedly, International General 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 International General will offset losses from the drop in International General's long position.

The idea behind Goosehead Insurance and International General 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.