Correlation Between Massachusetts Electric and CMS Energy
Can any of the company-specific risk be diversified away by investing in both Massachusetts Electric 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 Massachusetts Electric and CMS Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massachusetts Electric and CMS Energy, you can compare the effects of market volatilities on Massachusetts Electric 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 Massachusetts Electric with a short position of CMS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massachusetts Electric and CMS Energy.
Diversification Opportunities for Massachusetts Electric and CMS Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Massachusetts and CMS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Massachusetts Electric and CMS Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS Energy and Massachusetts Electric 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 Massachusetts Electric 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 Massachusetts Electric i.e., Massachusetts Electric and CMS Energy go up and down completely randomly.
Pair Corralation between Massachusetts Electric and CMS Energy
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 |
Massachusetts Electric vs. CMS Energy
Performance |
| Timeline |
| Massachusetts Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CMS Energy |
Massachusetts Electric and CMS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massachusetts Electric and CMS Energy
The main advantage of trading using opposite Massachusetts Electric and CMS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massachusetts Electric 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.| Massachusetts Electric vs. Omni Health | Massachusetts Electric vs. Regeneron Pharmaceuticals | Massachusetts Electric vs. Valneva SE ADR | Massachusetts Electric vs. Univest Pennsylvania |
| CMS Energy vs. Entergy | CMS Energy vs. Ameren Corp | CMS Energy vs. CenterPoint Energy | CMS Energy vs. Alliant Energy Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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