Correlation Between Citigroup and ATMOS

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

By analyzing existing cross correlation between Citigroup and ATMOS ENERGY P, you can compare the effects of market volatilities on Citigroup and ATMOS 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 Citigroup with a short position of ATMOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ATMOS.

Diversification Opportunities for Citigroup and ATMOS

-0.01

Correlation Coefficient

Citigroup  ATMOS

Good diversification

The 3 months correlation between Citigroup and ATMOS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ATMOS ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMOS ENERGY P and Citigroup 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 Citigroup are associated (or correlated) with ATMOS. 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 P has no effect on the direction of Citigroup i.e., Citigroup and ATMOS go up and down completely randomly.

Pair Corralation between Citigroup and ATMOS

Taking into account the 90-day investment horizon Citigroup is expected to generate 3.72 times less return on investment than ATMOS. In addition to that, Citigroup is 1.08 times more volatile than ATMOS ENERGY P. It trades about 0.06 of its total potential returns per unit of risk. ATMOS ENERGY P is currently generating about 0.22 per unit of volatility. If you would invest  8,461  in ATMOS ENERGY P on September 21, 2024 and sell it today you would earn a total of  274.00  from holding ATMOS ENERGY P or generate 3.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.09%
Values	Daily Returns

Citigroup  vs.  ATMOS ENERGY P

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ATMOS ENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATMOS ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ATMOS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and ATMOS

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

The idea behind Citigroup and ATMOS ENERGY P 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.