Correlation Between Albertsons Companies and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Atmos 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 Albertsons Companies and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Atmos Energy, you can compare the effects of market volatilities on Albertsons Companies and Atmos 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 Albertsons Companies with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Atmos Energy.
Diversification Opportunities for Albertsons Companies and Atmos Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Albertsons and Atmos is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Atmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmos Energy has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Atmos Energy go up and down completely randomly.
Pair Corralation between Albertsons Companies and Atmos Energy
Considering the 90-day investment horizon Albertsons Companies is expected to under-perform the Atmos Energy. In addition to that, Albertsons Companies is 1.0 times more volatile than Atmos Energy. It trades about -0.01 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.08 per unit of volatility. If you would invest 11,293 in Atmos Energy on September 4, 2024 and sell it today you would earn a total of 3,563 from holding Atmos Energy or generate 31.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Atmos Energy
Performance |
| Timeline |
| Albertsons Companies |
| Atmos Energy |
Albertsons Companies and Atmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Atmos Energy
The main advantage of trading using opposite Albertsons Companies and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Atmos 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 Atmos Energy will offset losses from the drop in Atmos Energy's long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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