Correlation Between Atmos Energy and Deluxe
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Deluxe 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 Deluxe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Deluxe, you can compare the effects of market volatilities on Atmos Energy and Deluxe 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 Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Deluxe.
Diversification Opportunities for Atmos Energy and Deluxe
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atmos and Deluxe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Atmos Energy i.e., Atmos Energy and Deluxe go up and down completely randomly.
Pair Corralation between Atmos Energy and Deluxe
Considering the 90-day investment horizon Atmos Energy is expected to generate 0.46 times more return on investment than Deluxe. However, Atmos Energy is 2.16 times less risky than Deluxe. It trades about 0.11 of its potential returns per unit of risk. Deluxe is currently generating about 0.03 per unit of risk. If you would invest 11,806 in Atmos Energy on November 3, 2024 and sell it today you would earn a total of 2,445 from holding Atmos Energy or generate 20.71% 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. Deluxe
Performance |
| Timeline |
| Atmos Energy |
| Deluxe |
Atmos Energy and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Deluxe
The main advantage of trading using opposite Atmos Energy and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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