Correlation Between Atmos Energy and Beijing Gas
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Beijing 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 Atmos Energy and Beijing Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Beijing Gas Blue, you can compare the effects of market volatilities on Atmos Energy and Beijing 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 Atmos Energy with a short position of Beijing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Beijing Gas.
Diversification Opportunities for Atmos Energy and Beijing Gas
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Atmos and Beijing is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Beijing Gas Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Gas Blue 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 Beijing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Gas Blue has no effect on the direction of Atmos Energy i.e., Atmos Energy and Beijing Gas go up and down completely randomly.
Pair Corralation between Atmos Energy and Beijing Gas
Considering the 90-day investment horizon Atmos Energy is expected to generate 31.74 times less return on investment than Beijing Gas. But when comparing it to its historical volatility, Atmos Energy is 47.82 times less risky than Beijing Gas. It trades about 0.09 of its potential returns per unit of risk. Beijing Gas Blue is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.90 in Beijing Gas Blue on August 31, 2024 and sell it today you would lose (1.49) from holding Beijing Gas Blue or give up 78.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Atmos Energy vs. Beijing Gas Blue
Performance |
| Timeline |
| Atmos Energy |
| Beijing Gas Blue |
Atmos Energy and Beijing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Beijing Gas
The main advantage of trading using opposite Atmos Energy and Beijing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Beijing 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 Beijing Gas will offset losses from the drop in Beijing Gas' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Beijing Gas vs. ENN Energy Holdings | Beijing Gas vs. EverGen Infrastructure Corp | Beijing Gas vs. OPAL Fuels | Beijing Gas vs. Atmos Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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