Cadmium crystallises in the hcp structure, but with an anomalously large c/a ratio, indicating a strong distortion away from ideal packing. Coupled cluster calculations within the framework of the method of increments with an embedding scheme for metals were performed to explore the potential energy surface of cadmium with respect to the hexagonal lattice parameters. This potential energy surface is compared to density functional theory based surfaces, as calculated with various functionals. The overall flatness of the potential energy surface over a wide range of values of the lattice parameter c is analogous for both treatments, however only within the method of increments do we quantitatively describe the cohesion. The overall behaviour of the method of increments for cadmium is consistent with previous results for zinc, emphasising the dominant role of electronic correlation in achieving a sufficiently accurate description of bonding properties for the two elements; however, a detailed analysis shows differences. We discuss this in detail in terms of the correlation contributions of the s- and d-electrons.