Correlation Between Atmos Energy and Spire
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Spire 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 Spire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Spire Inc, you can compare the effects of market volatilities on Atmos Energy and Spire 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 Spire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Spire.
Diversification Opportunities for Atmos Energy and Spire
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atmos and Spire is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Spire Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Inc 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 Spire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Inc has no effect on the direction of Atmos Energy i.e., Atmos Energy and Spire go up and down completely randomly.
Pair Corralation between Atmos Energy and Spire
Considering the 90-day investment horizon Atmos Energy is expected to generate 1.86 times more return on investment than Spire. However, Atmos Energy is 1.86 times more volatile than Spire Inc. It trades about 0.28 of its potential returns per unit of risk. Spire Inc is currently generating about 0.14 per unit of risk. If you would invest 11,135 in Atmos Energy on August 24, 2024 and sell it today you would earn a total of 3,891 from holding Atmos Energy or generate 34.94% 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. Spire Inc
Performance |
| Timeline |
| Atmos Energy |
| Spire Inc |
Atmos Energy and Spire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Spire
The main advantage of trading using opposite Atmos Energy and Spire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Spire 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 Spire will offset losses from the drop in Spire's long position.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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