Correlation Between CMG Holdings and KlausTech

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

Diversification Opportunities for CMG Holdings and KlausTech

0.0

Correlation Coefficient

CMG Holdings  KlausTech

Pay attention - limited upside

The 3 months correlation between CMG and KlausTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and KlausTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KlausTech 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 KlausTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KlausTech has no effect on the direction of CMG Holdings i.e., CMG Holdings and KlausTech go up and down completely randomly.

Pair Corralation between CMG Holdings and KlausTech

If you would invest  0.14  in CMG Holdings Group on December 28, 2024 and sell it today you would lose (0.01) from holding CMG Holdings Group or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CMG Holdings Group  vs.  KlausTech

CMG Holdings Group

Risk-Adjusted Performance

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 unfluctuating technical and fundamental indicators, CMG Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

KlausTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days KlausTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, KlausTech is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CMG Holdings and KlausTech

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

The idea behind CMG Holdings Group and KlausTech 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.