Correlation Between Atmos Energy and SNDL

Can any of the company-specific risk be diversified away by investing in both Atmos Energy and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atmos Energy and SNDL Inc, you can compare the effects of market volatilities on Atmos Energy and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and SNDL.

Diversification Opportunities for Atmos Energy and SNDL

-0.09

Correlation Coefficient

Atmos Energy  SNDL

Good diversification

The 3 months correlation between Atmos and SNDL is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 are associated (or correlated) with SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Atmos Energy i.e., Atmos Energy and SNDL go up and down completely randomly.

Pair Corralation between Atmos Energy and SNDL

Considering the 90-day investment horizon Atmos Energy is expected to generate 0.32 times more return on investment than SNDL. However, Atmos Energy is 3.17 times less risky than SNDL. It trades about 0.02 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.05 per unit of risk. If you would invest  13,791  in Atmos Energy on September 28, 2024 and sell it today you would earn a total of  150.00  from holding Atmos Energy or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atmos Energy  vs.  SNDL Inc

Atmos Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Atmos Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Atmos Energy and SNDL

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

The idea behind Atmos Energy and SNDL Inc 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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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.