Correlation Between CMG Holdings and MGO Global
Can any of the company-specific risk be diversified away by investing in both CMG Holdings and MGO Global 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 MGO Global 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 MGO Global Common, you can compare the effects of market volatilities on CMG Holdings and MGO Global 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 MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Holdings and MGO Global.
Diversification Opportunities for CMG Holdings and MGO Global
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CMG and MGO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of CMG Holdings i.e., CMG Holdings and MGO Global go up and down completely randomly.
Pair Corralation between CMG Holdings and MGO Global
Given the investment horizon of 90 days CMG Holdings Group is expected to generate 1.19 times more return on investment than MGO Global. However, CMG Holdings is 1.19 times more volatile than MGO Global Common. It trades about 0.08 of its potential returns per unit of risk. MGO Global Common is currently generating about 0.0 per unit of risk. If you would invest 0.14 in CMG Holdings Group on September 2, 2024 and sell it today you would earn a total of 0.04 from holding CMG Holdings Group or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMG Holdings Group vs. MGO Global Common
Performance |
| Timeline |
| CMG Holdings Group |
| MGO Global Common |
CMG Holdings and MGO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Holdings and MGO Global
The main advantage of trading using opposite CMG Holdings and MGO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Holdings position performs unexpectedly, MGO Global 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 MGO Global will offset losses from the drop in MGO Global's long position.| CMG Holdings vs. Tautachrome | CMG Holdings vs. VNUE Inc | CMG Holdings vs. South Beach Spirits | CMG Holdings vs. North Bay Resources |
| MGO Global vs. ADTRAN Inc | MGO Global vs. Belden Inc | MGO Global vs. ADC Therapeutics SA | MGO Global vs. Comtech Telecommunications Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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