Correlation Between Inuvo and MGO Global

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

By analyzing existing cross correlation between Inuvo Inc and MGO Global Common, you can compare the effects of market volatilities on Inuvo and MGO Global 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 Inuvo with a short position of MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inuvo and MGO Global.

Diversification Opportunities for Inuvo and MGO Global

0.44

Correlation Coefficient

Inuvo  MGO Global

Very weak diversification

The 3 months correlation between Inuvo and MGO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Inuvo Inc and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common and Inuvo 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 Inuvo Inc are associated (or correlated) with MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Inuvo i.e., Inuvo and MGO Global go up and down completely randomly.

Pair Corralation between Inuvo and MGO Global

Given the investment horizon of 90 days Inuvo Inc is expected to generate 1.0 times more return on investment than MGO Global. However, Inuvo is 1.0 times more volatile than MGO Global Common. It trades about 0.02 of its potential returns per unit of risk. MGO Global Common is currently generating about -0.02 per unit of risk. If you would invest  26.00  in Inuvo Inc on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Inuvo Inc or generate 0.0% return on investment over 90 days.

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

Inuvo Inc  vs.  MGO Global Common

Inuvo Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inuvo Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Inuvo may actually be approaching a critical reversion point that can send shares even higher in December 2024.

MGO Global Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MGO Global Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MGO Global is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Inuvo and MGO Global

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

The idea behind Inuvo Inc and MGO Global Common 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.