Correlation Between CMG Holdings and Cardlytics

Can any of the company-specific risk be diversified away by investing in both CMG Holdings and Cardlytics 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 Cardlytics 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 Cardlytics, you can compare the effects of market volatilities on CMG Holdings and Cardlytics 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 Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Holdings and Cardlytics.

Diversification Opportunities for CMG Holdings and Cardlytics

0.04

Correlation Coefficient

CMG Holdings  Cardlytics

Significant diversification

The 3 months correlation between CMG and Cardlytics is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of CMG Holdings i.e., CMG Holdings and Cardlytics go up and down completely randomly.

Pair Corralation between CMG Holdings and Cardlytics

Given the investment horizon of 90 days CMG Holdings Group is expected to generate 2.13 times more return on investment than Cardlytics. However, CMG Holdings is 2.13 times more volatile than Cardlytics. It trades about 0.05 of its potential returns per unit of risk. Cardlytics is currently generating about 0.08 per unit of risk. If you would invest  0.19  in CMG Holdings Group on September 26, 2024 and sell it today you would lose (0.01) from holding CMG Holdings Group or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CMG Holdings Group  vs.  Cardlytics

CMG Holdings Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CMG Holdings Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, CMG Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Cardlytics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CMG Holdings and Cardlytics

The main advantage of trading using opposite CMG Holdings and Cardlytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Holdings position performs unexpectedly, Cardlytics 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 Cardlytics will offset losses from the drop in Cardlytics' long position.

The idea behind CMG Holdings Group and Cardlytics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.