Correlation Between Ugi Corp and Atmos Energy

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

Diversification Opportunities for Ugi Corp and Atmos Energy

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ugi Corp and Atmos is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ugi Corp 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 Ugi Corp 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 Ugi Corp 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 Ugi Corp i.e., Ugi Corp and Atmos Energy go up and down completely randomly.

Pair Corralation between Ugi Corp and Atmos Energy

Considering the 90-day investment horizon Ugi Corp is expected to under-perform the Atmos Energy. In addition to that, Ugi Corp is 1.13 times more volatile than Atmos Energy Corp. It trades about -0.32 of its total potential returns per unit of risk. Atmos Energy Corp is currently generating about -0.17 per unit of volatility. If you would invest  11,421  in Atmos Energy Corp on July 7, 2022 and sell it today you would lose (780.00)  from holding Atmos Energy Corp or give up 6.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ugi Corp  vs.  Atmos Energy Corp

 Performance (%) 
       Timeline  
Ugi Corp 
Ugi Corp Performance
0 of 100
Over the last 90 days Ugi Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ugi Corp Price Channel

Atmos Energy Corp 
Atmos Performance
0 of 100
Over the last 90 days Atmos Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Atmos Energy is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.

Atmos Price Channel

Ugi Corp and Atmos Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ugi Corp and Atmos Energy

The main advantage of trading using opposite Ugi Corp and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ugi Corp 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.
Ugi Corp vs. Rumble Inc
The idea behind Ugi Corp 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.
Atmos Energy vs. Rumble 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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