Correlation Between Atlanticus Holdings and CMS Energy
Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings 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 Atlanticus Holdings and CMS Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlanticus Holdings Corp and CMS Energy, you can compare the effects of market volatilities on Atlanticus Holdings 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 Atlanticus Holdings with a short position of CMS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and CMS Energy.
Diversification Opportunities for Atlanticus Holdings and CMS Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlanticus and CMS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings Corp and CMS Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS Energy and Atlanticus Holdings 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 Atlanticus Holdings Corp 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 Atlanticus Holdings i.e., Atlanticus Holdings and CMS Energy go up and down completely randomly.
Pair Corralation between Atlanticus Holdings and CMS Energy
Assuming the 90 days horizon Atlanticus Holdings is expected to generate 5.52 times less return on investment than CMS Energy. But when comparing it to its historical volatility, Atlanticus Holdings Corp is 1.16 times less risky than CMS Energy. It trades about 0.07 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 1,651 in CMS Energy on May 28, 2025 and sell it today you would earn a total of 223.00 from holding CMS Energy or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlanticus Holdings Corp vs. CMS Energy
Performance |
| Timeline |
| Atlanticus Holdings Corp |
| CMS Energy |
Atlanticus Holdings and CMS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlanticus Holdings and CMS Energy
The main advantage of trading using opposite Atlanticus Holdings and CMS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings 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.| Atlanticus Holdings vs. Atlanticus Holdings | Atlanticus Holdings vs. PRA Group | Atlanticus Holdings vs. Enova International | Atlanticus Holdings vs. Orix Corp Ads |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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