Correlation Between Cadiz Depositary and Consumers Energy

Can any of the company-specific risk be diversified away by investing in both Cadiz Depositary and Consumers 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 Cadiz Depositary and Consumers Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cadiz Depositary Shares and Consumers Energy, you can compare the effects of market volatilities on Cadiz Depositary and Consumers 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 Cadiz Depositary with a short position of Consumers Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadiz Depositary and Consumers Energy.

Diversification Opportunities for Cadiz Depositary and Consumers Energy

0.85

Correlation Coefficient

Cadiz Depositary  Consumers Energy

Very poor diversification

The 3 months correlation between Cadiz and Consumers is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cadiz Depositary Shares and Consumers Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumers Energy and Cadiz Depositary 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 Cadiz Depositary Shares are associated (or correlated) with Consumers Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumers Energy has no effect on the direction of Cadiz Depositary i.e., Cadiz Depositary and Consumers Energy go up and down completely randomly.

Pair Corralation between Cadiz Depositary and Consumers Energy

Assuming the 90 days horizon Cadiz Depositary Shares is expected to generate 0.75 times more return on investment than Consumers Energy. However, Cadiz Depositary Shares is 1.34 times less risky than Consumers Energy. It trades about 0.22 of its potential returns per unit of risk. Consumers Energy is currently generating about 0.1 per unit of risk. If you would invest  1,695  in Cadiz Depositary Shares on June 29, 2025 and sell it today you would earn a total of  242.00  from holding Cadiz Depositary Shares or generate 14.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Cadiz Depositary Shares  vs.  Consumers Energy

Cadiz Depositary Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cadiz Depositary Shares are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Cadiz Depositary reported solid returns over the last few months and may actually be approaching a breakup point.

Consumers Energy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Consumers Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Consumers Energy may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Cadiz Depositary and Consumers Energy

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

The idea behind Cadiz Depositary Shares and Consumers Energy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.