Correlation Between Atmos Energy and CF Industries
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and CF Industries 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 CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and CF Industries Holdings, you can compare the effects of market volatilities on Atmos Energy and CF Industries 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 CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and CF Industries.
Diversification Opportunities for Atmos Energy and CF Industries
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atmos and CF Industries is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and CF Industries Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Industries Holdings 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 CF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Industries Holdings has no effect on the direction of Atmos Energy i.e., Atmos Energy and CF Industries go up and down completely randomly.
Pair Corralation between Atmos Energy and CF Industries
Considering the 90-day investment horizon Atmos Energy is expected to generate 0.48 times more return on investment than CF Industries. However, Atmos Energy is 2.07 times less risky than CF Industries. It trades about 0.27 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.06 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. CF Industries Holdings
Performance |
| Timeline |
| Atmos Energy |
| CF Industries Holdings |
Atmos Energy and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and CF Industries
The main advantage of trading using opposite Atmos Energy and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, CF Industries 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 CF Industries will offset losses from the drop in CF Industries' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |