Correlation Between CMG Holdings and QuinStreet

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

Diversification Opportunities for CMG Holdings and QuinStreet

-0.33

Correlation Coefficient

CMG Holdings  QuinStreet

Very good diversification

The 3 months correlation between CMG and QuinStreet is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet 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 QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of CMG Holdings i.e., CMG Holdings and QuinStreet go up and down completely randomly.

Pair Corralation between CMG Holdings and QuinStreet

Given the investment horizon of 90 days CMG Holdings Group is expected to generate 4.44 times more return on investment than QuinStreet. However, CMG Holdings is 4.44 times more volatile than QuinStreet. It trades about 0.07 of its potential returns per unit of risk. QuinStreet is currently generating about -0.15 per unit of risk. If you would invest  0.18  in CMG Holdings Group on October 25, 2024 and sell it today you would earn a total of  0.01  from holding CMG Holdings Group or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

CMG Holdings Group  vs.  QuinStreet

CMG Holdings Group

Risk-Adjusted Performance

3 of 100

Very Weak

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

QuinStreet

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuinStreet are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, QuinStreet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CMG Holdings and QuinStreet

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

The idea behind CMG Holdings Group and QuinStreet 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.