Correlation Between Sun Pacific and CMG Holdings
Can any of the company-specific risk be diversified away by investing in both Sun Pacific 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 Sun Pacific and CMG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Pacific Holding and CMG Holdings Group, you can compare the effects of market volatilities on Sun Pacific 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 Sun Pacific with a short position of CMG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Pacific and CMG Holdings.
Diversification Opportunities for Sun Pacific and CMG Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sun and CMG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sun Pacific Holding 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 Sun Pacific 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 Sun Pacific Holding 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 Sun Pacific i.e., Sun Pacific and CMG Holdings go up and down completely randomly.
Pair Corralation between Sun Pacific and CMG Holdings
Given the investment horizon of 90 days Sun Pacific Holding is expected to generate 0.66 times more return on investment than CMG Holdings. However, Sun Pacific Holding is 1.51 times less risky than CMG Holdings. It trades about -0.24 of its potential returns per unit of risk. CMG Holdings Group is currently generating about -0.17 per unit of risk. If you would invest 148.00 in Sun Pacific Holding on December 10, 2024 and sell it today you would lose (43.00) from holding Sun Pacific Holding or give up 29.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Pacific Holding vs. CMG Holdings Group
Performance |
| Timeline |
| Sun Pacific Holding |
| CMG Holdings Group |
Sun Pacific and CMG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Pacific and CMG Holdings
The main advantage of trading using opposite Sun Pacific and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Pacific 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.| Sun Pacific vs. Global Payout | ||
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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