Correlation Between CMS Energy and Oxford Square
Can any of the company-specific risk be diversified away by investing in both CMS Energy and Oxford Square 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 Oxford Square 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 Oxford Square Capital, you can compare the effects of market volatilities on CMS Energy and Oxford Square 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 Oxford Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Oxford Square.
Diversification Opportunities for CMS Energy and Oxford Square
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CMS and Oxford is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy Corp and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital 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 Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of CMS Energy i.e., CMS Energy and Oxford Square go up and down completely randomly.
Pair Corralation between CMS Energy and Oxford Square
Given the investment horizon of 90 days CMS Energy is expected to generate 1.15 times less return on investment than Oxford Square. In addition to that, CMS Energy is 1.13 times more volatile than Oxford Square Capital. It trades about 0.05 of its total potential returns per unit of risk. Oxford Square Capital is currently generating about 0.07 per unit of volatility. If you would invest 2,046 in Oxford Square Capital on August 27, 2024 and sell it today you would earn a total of 428.00 from holding Oxford Square Capital or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMS Energy Corp vs. Oxford Square Capital
Performance |
| Timeline |
| CMS Energy Corp |
| Oxford Square Capital |
CMS Energy and Oxford Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Oxford Square
The main advantage of trading using opposite CMS Energy and Oxford Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, Oxford Square 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 Oxford Square will offset losses from the drop in Oxford Square's long position.| CMS Energy vs. CMS Energy Corp | CMS Energy vs. CMS Energy Corp | CMS Energy vs. DTE Energy Co | CMS Energy vs. Duke Energy Corp |
| Oxford Square vs. Brighthouse Financial | Oxford Square vs. American Financial Group | Oxford Square vs. CMS Energy Corp | Oxford Square vs. Reinsurance Group of |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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