Correlation Between Expand Energy and CMG Holdings
Can any of the company-specific risk be diversified away by investing in both Expand Energy and CMG Holdings 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 Expand Energy and CMG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and CMG Holdings Group, you can compare the effects of market volatilities on Expand Energy and CMG Holdings 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 Expand Energy with a short position of CMG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and CMG Holdings.
Diversification Opportunities for Expand Energy and CMG Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expand and CMG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and CMG Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Holdings Group and Expand Energy 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 Expand Energy are associated (or correlated) with CMG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Holdings Group has no effect on the direction of Expand Energy i.e., Expand Energy and CMG Holdings go up and down completely randomly.
Pair Corralation between Expand Energy and CMG Holdings
Assuming the 90 days horizon Expand Energy is expected to generate 3.03 times less return on investment than CMG Holdings. But when comparing it to its historical volatility, Expand Energy is 5.0 times less risky than CMG Holdings. It trades about 0.1 of its potential returns per unit of risk. CMG Holdings Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.19 in CMG Holdings Group on November 3, 2024 and sell it today you would earn a total of 0.01 from holding CMG Holdings Group or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. CMG Holdings Group
Performance |
| Timeline |
| Expand Energy |
| CMG Holdings Group |
Expand Energy and CMG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and CMG Holdings
The main advantage of trading using opposite Expand Energy and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, CMG Holdings 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 CMG Holdings will offset losses from the drop in CMG Holdings' long position.| Expand Energy vs. BRP Inc | Expand Energy vs. Life Time Group | Expand Energy vs. Pintec Technology Holdings | Expand Energy vs. Nasdaq Inc |
| CMG Holdings vs. Tautachrome | CMG Holdings vs. VNUE Inc | CMG Holdings vs. South Beach Spirits | CMG Holdings vs. North Bay Resources |
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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