Correlation Between Dallasnews Corp and CMG Holdings

Can any of the company-specific risk be diversified away by investing in both Dallasnews Corp and CMG Holdings 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 Dallasnews Corp and CMG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dallasnews Corp and CMG Holdings Group, you can compare the effects of market volatilities on Dallasnews Corp and CMG Holdings 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 Dallasnews Corp with a short position of CMG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dallasnews Corp and CMG Holdings.

Diversification Opportunities for Dallasnews Corp and CMG Holdings

-0.42

Correlation Coefficient

Dallasnews Corp  CMG Holdings

Very good diversification

The 3 months correlation between Dallasnews and CMG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dallasnews Corp and CMG Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMG Holdings Group and Dallasnews Corp 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 Dallasnews Corp are associated (or correlated) with CMG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMG Holdings Group has no effect on the direction of Dallasnews Corp i.e., Dallasnews Corp and CMG Holdings go up and down completely randomly.

Pair Corralation between Dallasnews Corp and CMG Holdings

Given the investment horizon of 90 days Dallasnews Corp is expected to generate 0.5 times more return on investment than CMG Holdings. However, Dallasnews Corp is 2.02 times less risky than CMG Holdings. It trades about 0.13 of its potential returns per unit of risk. CMG Holdings Group is currently generating about 0.06 per unit of risk. If you would invest  305.00  in Dallasnews Corp on October 20, 2024 and sell it today you would earn a total of  374.00  from holding Dallasnews Corp or generate 122.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Dallasnews Corp  vs.  CMG Holdings Group

Dallasnews Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dallasnews Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent essential indicators, Dallasnews Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

CMG Holdings Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CMG Holdings Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CMG Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dallasnews Corp and CMG Holdings

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

The idea behind Dallasnews Corp and CMG Holdings Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.