Correlation Between KENEDIX OFFICE and Goosehead Insurance

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

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

Diversification Opportunities for KENEDIX OFFICE and Goosehead Insurance

0.12

Correlation Coefficient

KENEDIX OFFICE  Goosehead Insurance

Average diversification

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

Pair Corralation between KENEDIX OFFICE and Goosehead Insurance

Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.34 times more return on investment than Goosehead Insurance. However, KENEDIX OFFICE INV is 2.95 times less risky than Goosehead Insurance. It trades about 0.04 of its potential returns per unit of risk. Goosehead Insurance is currently generating about -0.02 per unit of risk. If you would invest  88,083  in KENEDIX OFFICE INV on April 24, 2025 and sell it today you would earn a total of  1,417  from holding KENEDIX OFFICE INV or generate 1.61% return on investment over 90 days.

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

KENEDIX OFFICE INV  vs.  Goosehead Insurance

KENEDIX OFFICE INV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KENEDIX OFFICE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KENEDIX OFFICE and Goosehead Insurance

The main advantage of trading using opposite KENEDIX OFFICE and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.