Correlation Between Atmos Energy and United Parks
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and United Parks Resorts, you can compare the effects of market volatilities on Atmos Energy and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and United Parks.
Diversification Opportunities for Atmos Energy and United Parks
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atmos and United is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Atmos Energy i.e., Atmos Energy and United Parks go up and down completely randomly.
Pair Corralation between Atmos Energy and United Parks
Considering the 90-day investment horizon Atmos Energy is expected to generate 1.81 times less return on investment than United Parks. But when comparing it to its historical volatility, Atmos Energy is 2.34 times less risky than United Parks. It trades about 0.22 of its potential returns per unit of risk. United Parks Resorts is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,224 in United Parks Resorts on August 24, 2024 and sell it today you would earn a total of 460.00 from holding United Parks Resorts or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. United Parks Resorts
Performance |
| Timeline |
| Atmos Energy |
| United Parks Resorts |
Atmos Energy and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and United Parks
The main advantage of trading using opposite Atmos Energy and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| United Parks vs. Vera Bradley | United Parks vs. Under Armour C | United Parks vs. Lakeland Industries | United Parks vs. Air Lease |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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