Correlation Between CMG Holdings and National CineMedia
Can any of the company-specific risk be diversified away by investing in both CMG Holdings and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on CMG Holdings and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Holdings and National CineMedia.
Diversification Opportunities for CMG Holdings and National CineMedia
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between CMG and National is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of CMG Holdings i.e., CMG Holdings and National CineMedia go up and down completely randomly.
Pair Corralation between CMG Holdings and National CineMedia
Given the investment horizon of 90 days CMG Holdings Group is expected to generate 4.61 times more return on investment than National CineMedia. However, CMG Holdings is 4.61 times more volatile than National CineMedia. It trades about 0.06 of its potential returns per unit of risk. National CineMedia is currently generating about 0.08 per unit of risk. If you would invest 0.20 in CMG Holdings Group on September 25, 2024 and sell it today you would lose (0.02) from holding CMG Holdings Group or give up 10.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
CMG Holdings Group vs. National CineMedia
Performance |
Timeline |
CMG Holdings Group |
National CineMedia |
CMG Holdings and National CineMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CMG Holdings and National CineMedia
The main advantage of trading using opposite CMG Holdings and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Holdings position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.CMG Holdings vs. 01 Communique Laboratory | CMG Holdings vs. LifeSpeak | CMG Holdings vs. RenoWorks Software | CMG Holdings vs. Aquagold International |
National CineMedia vs. CMG Holdings Group | National CineMedia vs. Beyond Commerce | National CineMedia vs. Mastermind | National CineMedia vs. Aquagold International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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