Correlation Between CK Infrastructure and CMS Energy
Can any of the company-specific risk be diversified away by investing in both CK Infrastructure and CMS Energy 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 CK Infrastructure and CMS Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Infrastructure Holdings and CMS Energy, you can compare the effects of market volatilities on CK Infrastructure and CMS Energy 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 CK Infrastructure with a short position of CMS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Infrastructure and CMS Energy.
Diversification Opportunities for CK Infrastructure and CMS Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CHH and CMS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CK Infrastructure Holdings and CMS Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS Energy and CK Infrastructure 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 CK Infrastructure Holdings are associated (or correlated) with CMS Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMS Energy has no effect on the direction of CK Infrastructure i.e., CK Infrastructure and CMS Energy go up and down completely randomly.
Pair Corralation between CK Infrastructure and CMS Energy
Assuming the 90 days horizon CK Infrastructure Holdings is expected to under-perform the CMS Energy. In addition to that, CK Infrastructure is 2.04 times more volatile than CMS Energy. It trades about -0.04 of its total potential returns per unit of risk. CMS Energy is currently generating about 0.04 per unit of volatility. If you would invest 6,349 in CMS Energy on September 13, 2024 and sell it today you would earn a total of 51.00 from holding CMS Energy or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Infrastructure Holdings vs. CMS Energy
Performance |
| Timeline |
| CK Infrastructure |
| CMS Energy |
CK Infrastructure and CMS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Infrastructure and CMS Energy
The main advantage of trading using opposite CK Infrastructure and CMS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Infrastructure position performs unexpectedly, CMS Energy 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 CMS Energy will offset losses from the drop in CMS Energy's long position.| CK Infrastructure vs. INSURANCE AUST GRP | CK Infrastructure vs. MSAD INSURANCE | CK Infrastructure vs. URBAN OUTFITTERS | CK Infrastructure vs. Singapore Reinsurance |
| CMS Energy vs. Gold Road Resources | CMS Energy vs. GOLD ROAD RES | CMS Energy vs. INTERSHOP Communications Aktiengesellschaft | CMS Energy vs. TRAINLINE PLC LS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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