Correlation Between Glory Star and CMG Holdings

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

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

Diversification Opportunities for Glory Star and CMG Holdings

0.0

Correlation Coefficient

Glory Star  CMG Holdings

Pay attention - limited upside

The 3 months correlation between Glory and CMG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New 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 Glory Star 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 Glory Star New 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 Glory Star i.e., Glory Star and CMG Holdings go up and down completely randomly.

Pair Corralation between Glory Star and CMG Holdings

If you would invest  0.15  in CMG Holdings Group on December 27, 2024 and sell it today you would lose (0.02) from holding CMG Holdings Group or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Glory Star New  vs.  CMG Holdings Group

Glory Star New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glory Star New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Glory Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CMG Holdings Group

Risk-Adjusted Performance

Very 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.

Pair Trading with Glory Star and CMG Holdings

The main advantage of trading using opposite Glory Star and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glory Star 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 Glory Star New 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.