Correlation Between Atmos Energy and Chemours
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Chemours 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 Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Chemours Co, you can compare the effects of market volatilities on Atmos Energy and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Chemours.
Diversification Opportunities for Atmos Energy and Chemours
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atmos and Chemours is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Atmos Energy i.e., Atmos Energy and Chemours go up and down completely randomly.
Pair Corralation between Atmos Energy and Chemours
Considering the 90-day investment horizon Atmos Energy is expected to generate 0.26 times more return on investment than Chemours. However, Atmos Energy is 3.84 times less risky than Chemours. It trades about 0.27 of its potential returns per unit of risk. Chemours Co is currently generating about -0.01 per unit of risk. If you would invest 11,413 in Atmos Energy on September 1, 2024 and sell it today you would earn a total of 3,719 from holding Atmos Energy or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. Chemours Co
Performance |
| Timeline |
| Atmos Energy |
| Chemours |
Atmos Energy and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Chemours
The main advantage of trading using opposite Atmos Energy and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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