Correlation Between CMG Holdings and Inuvo

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Can any of the company-specific risk be diversified away by investing in both CMG Holdings and Inuvo 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 CMG Holdings and Inuvo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMG Holdings Group and Inuvo Inc, you can compare the effects of market volatilities on CMG Holdings and Inuvo 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 CMG Holdings with a short position of Inuvo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Holdings and Inuvo.

Diversification Opportunities for CMG Holdings and Inuvo

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between CMG and Inuvo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and Inuvo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inuvo Inc and CMG Holdings 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 CMG Holdings Group are associated (or correlated) with Inuvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inuvo Inc has no effect on the direction of CMG Holdings i.e., CMG Holdings and Inuvo go up and down completely randomly.

Pair Corralation between CMG Holdings and Inuvo

Given the investment horizon of 90 days CMG Holdings Group is expected to generate 2.11 times more return on investment than Inuvo. However, CMG Holdings is 2.11 times more volatile than Inuvo Inc. It trades about 0.05 of its potential returns per unit of risk. Inuvo Inc is currently generating about 0.04 per unit of risk. If you would invest  0.29  in CMG Holdings Group on November 27, 2024 and sell it today you would lose (0.13) from holding CMG Holdings Group or give up 44.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.79%
ValuesDaily Returns

CMG Holdings Group  vs.  Inuvo Inc

 Performance 
       Timeline  
CMG Holdings Group 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CMG Holdings Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CMG Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.
Inuvo Inc 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Inuvo Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Inuvo showed solid returns over the last few months and may actually be approaching a breakup point.

CMG Holdings and Inuvo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CMG Holdings and Inuvo

The main advantage of trading using opposite CMG Holdings and Inuvo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Holdings position performs unexpectedly, Inuvo 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 Inuvo will offset losses from the drop in Inuvo's long position.
The idea behind CMG Holdings Group and Inuvo Inc 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.
Check out your portfolio center.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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