Correlation Between Enn Energy and Atmos Energy

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Can any of the company-specific risk be diversified away by investing in both Enn 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 Enn 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 Enn Energy Hldgs and Atmos Energy Corp, you can compare the effects of market volatilities on Enn 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 Enn Energy with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enn Energy and Atmos Energy.

Diversification Opportunities for Enn Energy and Atmos Energy

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between XNGSF and Atmos is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Enn Energy Hldgs and Atmos Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy Corp and Enn 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 Enn Energy Hldgs 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 Corp has no effect on the direction of Enn Energy i.e., Enn Energy and Atmos Energy go up and down completely randomly.

Pair Corralation between Enn Energy and Atmos Energy

Assuming the 90 days horizon Enn Energy Hldgs is expected to generate 1.73 times more return on investment than Atmos Energy. However, Enn Energy is 1.73 times more volatile than Atmos Energy Corp. It trades about 0.4 of its potential returns per unit of risk. Atmos Energy Corp is currently generating about 0.25 per unit of risk. If you would invest  1,005  in Enn Energy Hldgs on August 30, 2022 and sell it today you would earn a total of  327.00  from holding Enn Energy Hldgs or generate 32.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Enn Energy Hldgs  vs.  Atmos Energy Corp

 Performance (%) 
       Timeline  
Enn Energy Hldgs 
XNGSF Performance
0 of 100
Over the last 90 days Enn Energy Hldgs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Enn Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

XNGSF Price Channel

Atmos Energy Corp 
Atmos Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Atmos Energy is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Atmos Price Channel

Enn Energy and Atmos Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enn Energy and Atmos Energy

The main advantage of trading using opposite Enn Energy and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enn 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.
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The idea behind Enn Energy Hldgs and Atmos Energy Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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