Correlation Between Goosehead Insurance and Amdocs

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

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

Diversification Opportunities for Goosehead Insurance and Amdocs

0.8

Correlation Coefficient

Goosehead Insurance  Amdocs

Very poor diversification

The 3 months correlation between Goosehead and Amdocs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and Amdocs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs Limited 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 Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs Limited has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and Amdocs go up and down completely randomly.

Pair Corralation between Goosehead Insurance and Amdocs

Assuming the 90 days trading horizon Goosehead Insurance is expected to under-perform the Amdocs. In addition to that, Goosehead Insurance is 2.59 times more volatile than Amdocs Limited. It trades about -0.05 of its total potential returns per unit of risk. Amdocs Limited is currently generating about -0.09 per unit of volatility. If you would invest  7,799  in Amdocs Limited on May 6, 2025 and sell it today you would lose (501.00) from holding Amdocs Limited or give up 6.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

Goosehead Insurance  vs.  Amdocs Limited

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Amdocs Limited

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Goosehead Insurance and Amdocs Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.