Correlation Between Atmos Energy and Lakeland Industries
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Lakeland 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 Lakeland 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 Lakeland Industries, you can compare the effects of market volatilities on Atmos Energy and Lakeland 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 Lakeland Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Lakeland Industries.
Diversification Opportunities for Atmos Energy and Lakeland Industries
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atmos and Lakeland is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries 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 Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Atmos Energy i.e., Atmos Energy and Lakeland Industries go up and down completely randomly.
Pair Corralation between Atmos Energy and Lakeland Industries
Considering the 90-day investment horizon Atmos Energy is expected to generate 1.41 times less return on investment than Lakeland Industries. But when comparing it to its historical volatility, Atmos Energy is 2.74 times less risky than Lakeland Industries. It trades about 0.29 of its potential returns per unit of risk. Lakeland Industries is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,005 in Lakeland Industries on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Lakeland Industries or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Atmos Energy vs. Lakeland Industries
Performance |
| Timeline |
| Atmos Energy |
| Lakeland Industries |
Atmos Energy and Lakeland Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Lakeland Industries
The main advantage of trading using opposite Atmos Energy and Lakeland Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Lakeland 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 Lakeland Industries will offset losses from the drop in Lakeland Industries' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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