Correlation Between Emerald Expositions and CMG Holdings

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

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

Diversification Opportunities for Emerald Expositions and CMG Holdings

0.22

Correlation Coefficient

Emerald Expositions  CMG Holdings

Modest diversification

The 3 months correlation between Emerald and CMG is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events 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 Emerald Expositions 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 Emerald Expositions Events 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 Emerald Expositions i.e., Emerald Expositions and CMG Holdings go up and down completely randomly.

Pair Corralation between Emerald Expositions and CMG Holdings

Considering the 90-day investment horizon Emerald Expositions Events is expected to generate 0.17 times more return on investment than CMG Holdings. However, Emerald Expositions Events is 5.9 times less risky than CMG Holdings. It trades about 0.02 of its potential returns per unit of risk. CMG Holdings Group is currently generating about -0.02 per unit of risk. If you would invest  475.00  in Emerald Expositions Events on September 17, 2024 and sell it today you would earn a total of  2.00  from holding Emerald Expositions Events or generate 0.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Emerald Expositions Events  vs.  CMG Holdings Group

Emerald Expositions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerald Expositions Events has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Emerald Expositions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CMG Holdings Group

Risk-Adjusted Performance

1 of 100

Insignificant

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 weak technical and fundamental indicators, CMG Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Emerald Expositions and CMG Holdings

The main advantage of trading using opposite Emerald Expositions and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Expositions 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 Emerald Expositions Events 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.