Correlation Between Goosehead Insurance and CGN Power

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

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

Diversification Opportunities for Goosehead Insurance and CGN Power

0.0

Correlation Coefficient

Goosehead Insurance  CGN Power

Pay attention - limited upside

The 3 months correlation between Goosehead and CGN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and CGN Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Power 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 CGN Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Power has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and CGN Power go up and down completely randomly.

Pair Corralation between Goosehead Insurance and CGN Power

If you would invest  3,868  in Goosehead Insurance on October 25, 2024 and sell it today you would earn a total of  6,167  from holding Goosehead Insurance or generate 159.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Goosehead Insurance  vs.  CGN Power Co

Goosehead Insurance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goosehead Insurance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Goosehead Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CGN Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGN Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CGN Power is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Goosehead Insurance and CGN Power

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

The idea behind Goosehead Insurance and CGN Power Co 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.