Correlation Between CMS Energy and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both CMS Energy and Atlanticus Holdings 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 Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMS Energy and Atlanticus Holdings Corp, you can compare the effects of market volatilities on CMS Energy and Atlanticus Holdings 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 Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and Atlanticus Holdings.
Diversification Opportunities for CMS Energy and Atlanticus Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMS and Atlanticus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp 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 are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings Corp has no effect on the direction of CMS Energy i.e., CMS Energy and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between CMS Energy and Atlanticus Holdings
Assuming the 90 days trading horizon CMS Energy is expected to generate 1.03 times more return on investment than Atlanticus Holdings. However, CMS Energy is 1.03 times more volatile than Atlanticus Holdings Corp. It trades about 0.34 of its potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about 0.21 per unit of risk. If you would invest 1,650 in CMS Energy on June 7, 2025 and sell it today you would earn a total of 214.00 from holding CMS Energy or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMS Energy vs. Atlanticus Holdings Corp
Performance |
| Timeline |
| CMS Energy |
| Atlanticus Holdings Corp |
CMS Energy and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and Atlanticus Holdings
The main advantage of trading using opposite CMS Energy and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, Atlanticus Holdings 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 Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.| CMS Energy vs. Entergy Texas | CMS Energy vs. Duke Energy | CMS Energy vs. Spire Inc | CMS Energy vs. Consumers Energy |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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