Correlation Between Sealed Air and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Atmos Energy, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Atmos Energy.
Diversification Opportunities for Sealed Air and Atmos Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Atmos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and Atmos Energy go up and down completely randomly.
Pair Corralation between Sealed Air and Atmos Energy
Considering the 90-day investment horizon Sealed Air is expected to under-perform the Atmos Energy. In addition to that, Sealed Air is 1.92 times more volatile than Atmos Energy. It trades about -0.02 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.06 per unit of volatility. If you would invest 11,166 in Atmos Energy on August 30, 2024 and sell it today you would earn a total of 3,977 from holding Atmos Energy or generate 35.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Atmos Energy
Performance |
| Timeline |
| Sealed Air |
| Atmos Energy |
Sealed Air and Atmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Atmos Energy
The main advantage of trading using opposite Sealed Air and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| 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 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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