Correlation Between CMS Energy and Collective Mining
Can any of the company-specific risk be diversified away by investing in both CMS Energy and Collective Mining 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 Collective Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMS Energy Corp and Collective Mining, you can compare the effects of market volatilities on CMS Energy and Collective Mining 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 Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Collective Mining.
Diversification Opportunities for CMS Energy and Collective Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CMS and Collective is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy Corp and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Corp are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of CMS Energy i.e., CMS Energy and Collective Mining go up and down completely randomly.
Pair Corralation between CMS Energy and Collective Mining
Given the investment horizon of 90 days CMS Energy is expected to generate 14.08 times less return on investment than Collective Mining. But when comparing it to its historical volatility, CMS Energy Corp is 5.74 times less risky than Collective Mining. It trades about 0.04 of its potential returns per unit of risk. Collective Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 277.00 in Collective Mining on August 27, 2024 and sell it today you would earn a total of 68.00 from holding Collective Mining or generate 24.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.87% |
| Values | Daily Returns |
CMS Energy Corp vs. Collective Mining
Performance |
| Timeline |
| CMS Energy Corp |
| Collective Mining |
CMS Energy and Collective Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Collective Mining
The main advantage of trading using opposite CMS Energy and Collective Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, Collective Mining 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 Collective Mining will offset losses from the drop in Collective Mining's long position.| CMS Energy vs. CMS Energy Corp | CMS Energy vs. DTE Energy Co | CMS Energy vs. CMS Energy Corp | CMS Energy vs. Southern Co |
| Collective Mining vs. Nova Minerals Limited | Collective Mining vs. Nova Minerals Limited | Collective Mining vs. Solaris Resources | Collective Mining vs. MGE Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |