Correlation Between Naturgy Energy and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Naturgy Energy 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 Naturgy Energy and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturgy Energy Group and Atmos Energy, you can compare the effects of market volatilities on Naturgy Energy 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 Naturgy Energy with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturgy Energy and Atmos Energy.
Diversification Opportunities for Naturgy Energy and Atmos Energy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Naturgy and Atmos is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Naturgy Energy Group and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Naturgy 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 Naturgy Energy Group 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 Naturgy Energy i.e., Naturgy Energy and Atmos Energy go up and down completely randomly.
Pair Corralation between Naturgy Energy and Atmos Energy
Assuming the 90 days horizon Naturgy Energy Group is expected to under-perform the Atmos Energy. In addition to that, Naturgy Energy is 2.27 times more volatile than Atmos Energy. It trades about -0.2 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.1 per unit of volatility. If you would invest 11,610 in Atmos Energy on January 25, 2024 and sell it today you would earn a total of 258.00 from holding Atmos Energy or generate 2.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Naturgy Energy Group vs. Atmos Energy
Performance |
Timeline |
Naturgy Energy Group |
Atmos Energy |
Naturgy Energy and Atmos Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naturgy Energy and Atmos Energy
The main advantage of trading using opposite Naturgy Energy and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturgy Energy 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.Naturgy Energy vs. Anhui Conch Cement | Naturgy Energy vs. Sysmex Corp | Naturgy Energy vs. PICC Property and | Naturgy Energy vs. Aquagold International |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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