Correlation Between Atmos Energy and Neogen
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Neogen, you can compare the effects of market volatilities on Atmos Energy and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Neogen.
Diversification Opportunities for Atmos Energy and Neogen
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atmos and Neogen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Atmos Energy i.e., Atmos Energy and Neogen go up and down completely randomly.
Pair Corralation between Atmos Energy and Neogen
Considering the 90-day investment horizon Atmos Energy is expected to generate 0.4 times more return on investment than Neogen. However, Atmos Energy is 2.49 times less risky than Neogen. It trades about 0.05 of its potential returns per unit of risk. Neogen is currently generating about -0.01 per unit of risk. If you would invest 10,864 in Atmos Energy on September 19, 2024 and sell it today you would earn a total of 2,777 from holding Atmos Energy or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. Neogen
Performance |
| Timeline |
| Atmos Energy |
| Neogen |
Atmos Energy and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Neogen
The main advantage of trading using opposite Atmos Energy and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Atmos Energy vs. NiSource | Atmos Energy vs. Aquagold International | Atmos Energy vs. Thrivent High Yield | Atmos Energy vs. Morningstar Unconstrained Allocation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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