Correlation Between Beijing Media and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Beijing Media and Atmos Energy 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 Beijing Media and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Atmos Energy, you can compare the effects of market volatilities on Beijing Media and Atmos Energy 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 Beijing Media with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Media and Atmos Energy.
Diversification Opportunities for Beijing Media and Atmos Energy
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beijing and Atmos is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Beijing Media 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 Beijing Media are associated (or correlated) with Atmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmos Energy has no effect on the direction of Beijing Media i.e., Beijing Media and Atmos Energy go up and down completely randomly.
Pair Corralation between Beijing Media and Atmos Energy
Assuming the 90 days horizon Beijing Media is expected to generate 8.86 times less return on investment than Atmos Energy. In addition to that, Beijing Media is 6.2 times more volatile than Atmos Energy. It trades about 0.0 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.15 per unit of volatility. If you would invest 9,950 in Atmos Energy on September 4, 2024 and sell it today you would earn a total of 4,380 from holding Atmos Energy or generate 44.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Beijing Media vs. Atmos Energy
Performance |
| Timeline |
| Beijing Media |
| Atmos Energy |
Beijing Media and Atmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Media and Atmos Energy
The main advantage of trading using opposite Beijing Media and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Media position performs unexpectedly, Atmos Energy 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 Atmos Energy will offset losses from the drop in Atmos Energy's long position.| Beijing Media vs. Superior Plus Corp | Beijing Media vs. NMI Holdings | Beijing Media vs. Origin Agritech | Beijing Media vs. SIVERS SEMICONDUCTORS AB |
| Atmos Energy vs. Apple Inc | Atmos Energy vs. Apple Inc | Atmos Energy vs. Apple Inc | Atmos Energy vs. Apple Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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