Correlation Between South Beach and CMG Holdings
Can any of the company-specific risk be diversified away by investing in both South Beach 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 South Beach and CMG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Beach Spirits and CMG Holdings Group, you can compare the effects of market volatilities on South Beach 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 South Beach with a short position of CMG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Beach and CMG Holdings.
Diversification Opportunities for South Beach and CMG Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and CMG is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding South Beach Spirits 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 South Beach 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 South Beach Spirits 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 South Beach i.e., South Beach and CMG Holdings go up and down completely randomly.
Pair Corralation between South Beach and CMG Holdings
Given the investment horizon of 90 days South Beach Spirits is expected to generate 3.56 times more return on investment than CMG Holdings. However, South Beach is 3.56 times more volatile than CMG Holdings Group. It trades about 0.13 of its potential returns per unit of risk. CMG Holdings Group is currently generating about 0.07 per unit of risk. If you would invest 0.04 in South Beach Spirits on August 29, 2024 and sell it today you would lose (0.03) from holding South Beach Spirits or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Beach Spirits vs. CMG Holdings Group
Performance |
| Timeline |
| South Beach Spirits |
| CMG Holdings Group |
South Beach and CMG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Beach and CMG Holdings
The main advantage of trading using opposite South Beach and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Beach 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.| South Beach vs. Duckhorn Portfolio | South Beach vs. Brown Forman | South Beach vs. Brown Forman | South Beach vs. Diageo PLC ADR |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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