Correlation Between US Global and ATMOS

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

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

Diversification Opportunities for US Global and ATMOS

-0.32

Correlation Coefficient

US Global  ATMOS

Very good diversification

The 3 months correlation between GROW and ATMOS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors 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 US Global 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 US Global Investors 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 US Global i.e., US Global and ATMOS go up and down completely randomly.

Pair Corralation between US Global and ATMOS

Given the investment horizon of 90 days US Global is expected to generate 49.27 times less return on investment than ATMOS. But when comparing it to its historical volatility, US Global Investors is 1.1 times less risky than ATMOS. It trades about 0.0 of its potential returns per unit of risk. ATMOS ENERGY P is currently generating about 0.22 of returns per unit of risk over similar time horizon. 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

US Global Investors  vs.  ATMOS ENERGY P

US Global Investors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US Global Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, US Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 US Global and ATMOS

The main advantage of trading using opposite US Global and ATMOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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 US Global Investors 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.