Correlation Between Gap, and ATMOS

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

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

Diversification Opportunities for Gap, and ATMOS

-0.15

Correlation Coefficient

Gap,  ATMOS

Good diversification

The 3 months correlation between Gap, and ATMOS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, 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 Gap, 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 The Gap, 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 Gap, i.e., Gap, and ATMOS go up and down completely randomly.

Pair Corralation between Gap, and ATMOS

Considering the 90-day investment horizon The Gap, is expected to generate 2.65 times more return on investment than ATMOS. However, Gap, is 2.65 times more volatile than ATMOS ENERGY P. It trades about 0.11 of its potential returns per unit of risk. ATMOS ENERGY P is currently generating about -0.28 per unit of risk. If you would invest  2,013  in The Gap, on September 21, 2024 and sell it today you would earn a total of  399.00  from holding The Gap, or generate 19.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.63%
Values	Daily Returns

The Gap,  vs.  ATMOS ENERGY P

Gap,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ATMOS ENERGY P investors.

Pair Trading with Gap, and ATMOS

The main advantage of trading using opposite Gap, and ATMOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, 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.

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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.