Correlation Between Atmos Energy and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and PGE Corp 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 PGE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and PGE Corp, you can compare the effects of market volatilities on Atmos Energy and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and PGE Corp.
Diversification Opportunities for Atmos Energy and PGE Corp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atmos and PGE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Atmos Energy i.e., Atmos Energy and PGE Corp go up and down completely randomly.
Pair Corralation between Atmos Energy and PGE Corp
Considering the 90-day investment horizon Atmos Energy is expected to generate 1.03 times more return on investment than PGE Corp. However, Atmos Energy is 1.03 times more volatile than PGE Corp. It trades about 0.23 of its potential returns per unit of risk. PGE Corp is currently generating about 0.15 per unit of risk. If you would invest 14,311 in Atmos Energy on August 24, 2024 and sell it today you would earn a total of 715.00 from holding Atmos Energy or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. PGE Corp
Performance |
| Timeline |
| Atmos Energy |
| PGE Corp |
Atmos Energy and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and PGE Corp
The main advantage of trading using opposite Atmos Energy and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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