Correlation Between Atmos Energy and Mastercard
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Mastercard 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 Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Mastercard, you can compare the effects of market volatilities on Atmos Energy and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Mastercard.
Diversification Opportunities for Atmos Energy and Mastercard
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atmos and Mastercard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Atmos Energy i.e., Atmos Energy and Mastercard go up and down completely randomly.
Pair Corralation between Atmos Energy and Mastercard
Considering the 90-day investment horizon Atmos Energy is expected to generate 1.26 times less return on investment than Mastercard. But when comparing it to its historical volatility, Atmos Energy is 1.02 times less risky than Mastercard. It trades about 0.09 of its potential returns per unit of risk. Mastercard is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 36,604 in Mastercard on September 1, 2024 and sell it today you would earn a total of 16,690 from holding Mastercard or generate 45.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. Mastercard
Performance |
| Timeline |
| Atmos Energy |
| Mastercard |
Atmos Energy and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Mastercard
The main advantage of trading using opposite Atmos Energy and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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