Correlation Between Goosehead Insurance and Ambev SA

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

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

Diversification Opportunities for Goosehead Insurance and Ambev SA

0.6

Correlation Coefficient

Goosehead Insurance  Ambev SA

Poor diversification

The 3 months correlation between Goosehead and Ambev is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and Ambev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev 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 Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and Ambev SA go up and down completely randomly.

Pair Corralation between Goosehead Insurance and Ambev SA

Assuming the 90 days trading horizon Goosehead Insurance is expected to under-perform the Ambev SA. In addition to that, Goosehead Insurance is 1.42 times more volatile than Ambev SA. It trades about -0.04 of its total potential returns per unit of risk. Ambev SA is currently generating about -0.03 per unit of volatility. If you would invest  212.00  in Ambev SA on April 23, 2025 and sell it today you would lose (8.00) from holding Ambev SA or give up 3.77% of portfolio value over 90 days.

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

Goosehead Insurance  vs.  Ambev SA

Goosehead Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goosehead Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Goosehead Insurance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ambev SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambev SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ambev SA 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 Ambev SA

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

The idea behind Goosehead Insurance and Ambev 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.