Correlation Between Goosehead Insurance and BB Seguridade

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

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

Diversification Opportunities for Goosehead Insurance and BB Seguridade

0.68

Correlation Coefficient

Goosehead Insurance  BB Seguridade

Poor diversification

The 3 months correlation between Goosehead and BBSEY is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Goosehead Insurance and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic 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 BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Goosehead Insurance i.e., Goosehead Insurance and BB Seguridade go up and down completely randomly.

Pair Corralation between Goosehead Insurance and BB Seguridade

Given the investment horizon of 90 days Goosehead Insurance is expected to under-perform the BB Seguridade. In addition to that, Goosehead Insurance is 2.43 times more volatile than BB Seguridade Participacoes. It trades about -0.09 of its total potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.08 per unit of volatility. If you would invest  687.00  in BB Seguridade Participacoes on May 14, 2025 and sell it today you would lose (45.00) from holding BB Seguridade Participacoes or give up 6.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Goosehead Insurance  vs.  BB Seguridade Participacoes

Goosehead Insurance

Risk-Adjusted Performance

Weakest

Over the last 90 days Goosehead Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

BB Seguridade Partic

Risk-Adjusted Performance

Weakest

Over the last 90 days BB Seguridade Participacoes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Goosehead Insurance and BB Seguridade

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

The idea behind Goosehead Insurance and BB Seguridade Participacoes 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.