Correlation Between Atmos Energy and Air Products
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Air Products 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 Atmos Energy and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Air Products and, you can compare the effects of market volatilities on Atmos Energy and Air Products 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 Atmos Energy with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Air Products.
Diversification Opportunities for Atmos Energy and Air Products
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atmos and Air is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Atmos 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 Atmos Energy are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Atmos Energy i.e., Atmos Energy and Air Products go up and down completely randomly.
Pair Corralation between Atmos Energy and Air Products
Considering the 90-day investment horizon Atmos Energy is expected to generate 0.56 times more return on investment than Air Products. However, Atmos Energy is 1.78 times less risky than Air Products. It trades about 0.09 of its potential returns per unit of risk. Air Products and is currently generating about 0.04 per unit of risk. If you would invest 11,293 in Atmos Energy on August 31, 2024 and sell it today you would earn a total of 3,839 from holding Atmos Energy or generate 33.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. Air Products and
Performance |
| Timeline |
| Atmos Energy |
| Air Products |
Atmos Energy and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Air Products
The main advantage of trading using opposite Atmos Energy and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Air Products vs. Eastman Chemical | Air Products vs. Linde plc Ordinary | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |