Correlation Between CMS Energy and Massachusetts Electric
Can any of the company-specific risk be diversified away by investing in both CMS Energy and Massachusetts Electric 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 CMS Energy and Massachusetts Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMS Energy and Massachusetts Electric, you can compare the effects of market volatilities on CMS Energy and Massachusetts Electric 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 CMS Energy with a short position of Massachusetts Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Massachusetts Electric.
Diversification Opportunities for CMS Energy and Massachusetts Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CMS and Massachusetts is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy and Massachusetts Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Electric and CMS Energy 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 CMS Energy are associated (or correlated) with Massachusetts Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Electric has no effect on the direction of CMS Energy i.e., CMS Energy and Massachusetts Electric go up and down completely randomly.
Pair Corralation between CMS Energy and Massachusetts Electric
If you would invest (100.00) in Massachusetts Electric on October 11, 2024 and sell it today you would earn a total of 100.00 from holding Massachusetts Electric or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CMS Energy vs. Massachusetts Electric
Performance |
| Timeline |
| CMS Energy |
| Massachusetts Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CMS Energy and Massachusetts Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Massachusetts Electric
The main advantage of trading using opposite CMS Energy and Massachusetts Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, Massachusetts Electric 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 Massachusetts Electric will offset losses from the drop in Massachusetts Electric's long position.| CMS Energy vs. Entergy | CMS Energy vs. Ameren Corp | CMS Energy vs. CenterPoint Energy | CMS Energy vs. Alliant Energy Corp |
| Massachusetts Electric vs. Omni Health | Massachusetts Electric vs. Regeneron Pharmaceuticals | Massachusetts Electric vs. Valneva SE ADR | Massachusetts Electric vs. Univest Pennsylvania |
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 CEOs Directory module to screen CEOs from public companies around the world.
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