Correlation Between MOGU and Goosehead Insurance

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

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

Diversification Opportunities for MOGU and Goosehead Insurance

-0.12

Correlation Coefficient

MOGU  Goosehead Insurance

Good diversification

The 3 months correlation between MOGU and Goosehead is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding MOGU Inc and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance and MOGU 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 MOGU Inc 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 MOGU i.e., MOGU and Goosehead Insurance go up and down completely randomly.

Pair Corralation between MOGU and Goosehead Insurance

Given the investment horizon of 90 days MOGU is expected to generate 2.37 times less return on investment than Goosehead Insurance. In addition to that, MOGU is 1.77 times more volatile than Goosehead Insurance. It trades about 0.02 of its total potential returns per unit of risk. Goosehead Insurance is currently generating about 0.08 per unit of volatility. If you would invest  3,666  in Goosehead Insurance on October 11, 2024 and sell it today you would earn a total of  6,706  from holding Goosehead Insurance or generate 182.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.59%
Values	Daily Returns

MOGU Inc  vs.  Goosehead Insurance

MOGU Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

Goosehead Insurance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goosehead Insurance are ranked lower than 7 (%) 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.

Pair Trading with MOGU and Goosehead Insurance

The main advantage of trading using opposite MOGU and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOGU 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.

The idea behind MOGU Inc and Goosehead 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..