Correlation Between CMG Holdings and Global Payout

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

Diversification Opportunities for CMG Holdings and Global Payout

0.37

Correlation Coefficient

CMG Holdings  Global Payout

Weak diversification

The 3 months correlation between CMG and Global is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and Global Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payout 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 Global Payout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payout has no effect on the direction of CMG Holdings i.e., CMG Holdings and Global Payout go up and down completely randomly.

Pair Corralation between CMG Holdings and Global Payout

Given the investment horizon of 90 days CMG Holdings is expected to generate 16.63 times less return on investment than Global Payout. But when comparing it to its historical volatility, CMG Holdings Group is 3.33 times less risky than Global Payout. It trades about 0.03 of its potential returns per unit of risk. Global Payout is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Global Payout on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Global Payout or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

CMG Holdings Group  vs.  Global Payout

CMG Holdings Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CMG Holdings Group are ranked lower than 2 (%) 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.

Global Payout

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Payout are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Global Payout exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CMG Holdings and Global Payout

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

The idea behind CMG Holdings Group and Global Payout 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.