Correlation Between Atmos Energy and Atlas Salt

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Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Atlas Salt 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 Atlas Salt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy Corp and Atlas Salt, you can compare the effects of market volatilities on Atmos Energy and Atlas Salt 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 Atlas Salt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Atlas Salt.

Diversification Opportunities for Atmos Energy and Atlas Salt

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Atmos and Atlas is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy Corp and Atlas Salt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Salt 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 Corp are associated (or correlated) with Atlas Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Salt has no effect on the direction of Atmos Energy i.e., Atmos Energy and Atlas Salt go up and down completely randomly.

Pair Corralation between Atmos Energy and Atlas Salt

Considering the 90-day investment horizon Atmos Energy is expected to generate 31.48 times less return on investment than Atlas Salt. But when comparing it to its historical volatility, Atmos Energy Corp is 12.86 times less risky than Atlas Salt. It trades about 0.06 of its potential returns per unit of risk. Atlas Salt is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  222.00  in Atlas Salt on May 10, 2022 and sell it today you would earn a total of  73.00  from holding Atlas Salt or generate 32.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Atmos Energy Corp  vs.  Atlas Salt

 Performance (%) 
       Timeline  
Atmos Energy Corp 
Atmos Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy Corp are ranked lower than 1 (%) 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 current stock price mess, may contribute to short-term losses for the institutional investors.

Atmos Price Channel

Atlas Salt 
Atlas Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Salt are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Atlas Salt exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atlas Price Channel

Atmos Energy and Atlas Salt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atmos Energy and Atlas Salt

The main advantage of trading using opposite Atmos Energy and Atlas Salt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Atlas Salt 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 Atlas Salt will offset losses from the drop in Atlas Salt's long position.
The idea behind Atmos Energy Corp and Atlas Salt 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.

Atlas Salt

Pair trading matchups for Atlas Salt

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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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