Correlation Between Goosehead Insurance and BAKED GAMES

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

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

Diversification Opportunities for Goosehead Insurance and BAKED GAMES

0.58

Correlation Coefficient

Goosehead Insurance  BAKED GAMES

Very weak diversification

The 3 months correlation between Goosehead and BAKED is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and BAKED GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKED GAMES SA 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 BAKED GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKED GAMES SA has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and BAKED GAMES go up and down completely randomly.

Pair Corralation between Goosehead Insurance and BAKED GAMES

Assuming the 90 days trading horizon Goosehead Insurance is expected to generate 0.94 times more return on investment than BAKED GAMES. However, Goosehead Insurance is 1.06 times less risky than BAKED GAMES. It trades about 0.02 of its potential returns per unit of risk. BAKED GAMES SA is currently generating about -0.03 per unit of risk. If you would invest  8,484  in Goosehead Insurance on April 22, 2025 and sell it today you would earn a total of  152.00  from holding Goosehead Insurance or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Goosehead Insurance  vs.  BAKED GAMES SA

Goosehead Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goosehead Insurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Goosehead Insurance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BAKED GAMES SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Goosehead Insurance and BAKED GAMES

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

The idea behind Goosehead Insurance and BAKED GAMES SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .