Correlation Between CMG Holdings and Tautachrome

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

Diversification Opportunities for CMG Holdings and Tautachrome

0.0

Correlation Coefficient

CMG Holdings  Tautachrome

Pay attention - limited upside

The 3 months correlation between CMG and Tautachrome is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMG Holdings Group and Tautachrome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tautachrome 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 Tautachrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tautachrome has no effect on the direction of CMG Holdings i.e., CMG Holdings and Tautachrome go up and down completely randomly.

Pair Corralation between CMG Holdings and Tautachrome

Given the investment horizon of 90 days CMG Holdings is expected to generate 1.04 times less return on investment than Tautachrome. But when comparing it to its historical volatility, CMG Holdings Group is 1.43 times less risky than Tautachrome. It trades about 0.04 of its potential returns per unit of risk. Tautachrome is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.06  in Tautachrome on September 1, 2024 and sell it today you would lose (0.06) from holding Tautachrome or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CMG Holdings Group  vs.  Tautachrome

CMG Holdings Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CMG Holdings Group are ranked lower than 5 (%) 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.

Tautachrome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tautachrome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CMG Holdings and Tautachrome

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

The idea behind CMG Holdings Group and Tautachrome 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..