Correlation Between ACRES Commercial and CMS Energy
Can any of the company-specific risk be diversified away by investing in both ACRES Commercial 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 ACRES Commercial and CMS Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACRES Commercial Realty and CMS Energy, you can compare the effects of market volatilities on ACRES Commercial 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 ACRES Commercial with a short position of CMS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACRES Commercial and CMS Energy.
Diversification Opportunities for ACRES Commercial and CMS Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACRES and CMS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and CMS Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS Energy and ACRES Commercial 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 ACRES Commercial Realty 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 ACRES Commercial i.e., ACRES Commercial and CMS Energy go up and down completely randomly.
Pair Corralation between ACRES Commercial and CMS Energy
Assuming the 90 days trading horizon ACRES Commercial is expected to generate 3.12 times less return on investment than CMS Energy. But when comparing it to its historical volatility, ACRES Commercial Realty is 1.27 times less risky than CMS Energy. It trades about 0.13 of its potential returns per unit of risk. CMS Energy is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,645 in CMS Energy on June 6, 2025 and sell it today you would earn a total of 206.00 from holding CMS Energy or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
ACRES Commercial Realty vs. CMS Energy
Performance |
| Timeline |
| ACRES Commercial Realty |
| CMS Energy |
ACRES Commercial and CMS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACRES Commercial and CMS Energy
The main advantage of trading using opposite ACRES Commercial and CMS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACRES Commercial 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.| ACRES Commercial vs. ACRES Commercial Realty | ACRES Commercial vs. Cherry Hill Mortgage | ACRES Commercial vs. AG Mortgage Investment | ACRES Commercial vs. Chimera Investment |
| CMS Energy vs. Entergy Texas | CMS Energy vs. Duke Energy | CMS Energy vs. Spire Inc | CMS Energy vs. Consumers 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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