Correlation Between CMS Energy and One Gas

Can any of the company-specific risk be diversified away by investing in both CMS Energy and One Gas 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 One Gas 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 One Gas, you can compare the effects of market volatilities on CMS Energy and One Gas 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 One Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and One Gas.

Diversification Opportunities for CMS Energy and One Gas

0.89

Correlation Coefficient

CMS Energy  One Gas

Very poor diversification

The 3 months correlation between CMS and One is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy Corp and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas 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 One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of CMS Energy i.e., CMS Energy and One Gas go up and down completely randomly.

Pair Corralation between CMS Energy and One Gas

Given the investment horizon of 90 days CMS Energy Corp is expected to generate 0.55 times more return on investment than One Gas. However, CMS Energy Corp is 1.82 times less risky than One Gas. It trades about 0.39 of its potential returns per unit of risk. One Gas is currently generating about 0.15 per unit of risk. If you would invest  2,132  in CMS Energy Corp on July 12, 2025 and sell it today you would earn a total of  316.00  from holding CMS Energy Corp or generate 14.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CMS Energy Corp  vs.  One Gas

CMS Energy Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CMS Energy Corp are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, CMS Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

One Gas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One Gas are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, One Gas may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with CMS Energy and One Gas

The main advantage of trading using opposite CMS Energy and One Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, One Gas 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 One Gas will offset losses from the drop in One Gas' long position.

The idea behind CMS Energy Corp and One Gas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.