Correlation Between Integral and CMG Holdings

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

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

Diversification Opportunities for Integral and CMG Holdings

0.17

Correlation Coefficient

Integral  CMG Holdings

Average diversification

The 3 months correlation between Integral and CMG is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and CMG Holdings go up and down completely randomly.

Pair Corralation between Integral and CMG Holdings

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the CMG Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 4.08 times less risky than CMG Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The CMG Holdings Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.19  in CMG Holdings Group on September 27, 2024 and sell it today you would lose (0.01) from holding CMG Holdings Group or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Integral Ad Science  vs.  CMG Holdings Group

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CMG Holdings Group

Risk-Adjusted Performance

3 of 100

Insignificant

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 fragile 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 Integral and CMG Holdings

The main advantage of trading using opposite Integral and CMG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.