Correlation Between MGO Global and CMG Holdings
Can any of the company-specific risk be diversified away by investing in both MGO Global 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 MGO Global and CMG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGO Global Common and CMG Holdings Group, you can compare the effects of market volatilities on MGO Global 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 MGO Global with a short position of CMG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGO Global and CMG Holdings.
Diversification Opportunities for MGO Global and CMG Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGO and CMG is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MGO Global Common 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 MGO Global 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 MGO Global Common 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 MGO Global i.e., MGO Global and CMG Holdings go up and down completely randomly.
Pair Corralation between MGO Global and CMG Holdings
Given the investment horizon of 90 days MGO Global Common is expected to under-perform the CMG Holdings. But the stock apears to be less risky and, when comparing its historical volatility, MGO Global Common is 1.19 times less risky than CMG Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The CMG Holdings Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
MGO Global Common vs. CMG Holdings Group
Performance |
| Timeline |
| MGO Global Common |
| CMG Holdings Group |
MGO Global and CMG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGO Global and CMG Holdings
The main advantage of trading using opposite MGO Global and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGO Global 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.| MGO Global vs. ADTRAN Inc | MGO Global vs. Belden Inc | MGO Global vs. ADC Therapeutics SA | MGO Global vs. Comtech Telecommunications Corp |
| 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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