Correlation Between CMS Energy and Credit Enhanced
Can any of the company-specific risk be diversified away by investing in both CMS Energy and Credit Enhanced 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 Credit Enhanced 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 Credit Enhanced Corts, you can compare the effects of market volatilities on CMS Energy and Credit Enhanced 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 Credit Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Credit Enhanced.
Diversification Opportunities for CMS Energy and Credit Enhanced
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CMS and Credit is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy Corp and Credit Enhanced Corts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Enhanced Corts 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 Credit Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Enhanced Corts has no effect on the direction of CMS Energy i.e., CMS Energy and Credit Enhanced go up and down completely randomly.
Pair Corralation between CMS Energy and Credit Enhanced
Given the investment horizon of 90 days CMS Energy Corp is expected to generate 0.73 times more return on investment than Credit Enhanced. However, CMS Energy Corp is 1.38 times less risky than Credit Enhanced. It trades about -0.04 of its potential returns per unit of risk. Credit Enhanced Corts is currently generating about -0.08 per unit of risk. If you would invest 2,447 in CMS Energy Corp on August 30, 2024 and sell it today you would lose (11.00) from holding CMS Energy Corp or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMS Energy Corp vs. Credit Enhanced Corts
Performance |
| Timeline |
| CMS Energy Corp |
| Credit Enhanced Corts |
CMS Energy and Credit Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Credit Enhanced
The main advantage of trading using opposite CMS Energy and Credit Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, Credit Enhanced 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 Credit Enhanced will offset losses from the drop in Credit Enhanced's long position.| CMS Energy vs. Southern Co | CMS Energy vs. Southern Company Series | CMS Energy vs. ATT Inc | CMS Energy vs. Aegon Funding |
| Credit Enhanced vs. Structured Products Corp | Credit Enhanced vs. Strats Trust Cellular | Credit Enhanced vs. Goldman Sachs Capital | Credit Enhanced vs. STRATS SM Trust |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |