Correlation Between Nasdaq and ATMOS

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

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

Diversification Opportunities for Nasdaq and ATMOS

0.02

Correlation Coefficient

Nasdaq  ATMOS

Significant diversification

The 3 months correlation between Nasdaq and ATMOS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and ATMOS go up and down completely randomly.

Pair Corralation between Nasdaq and ATMOS

Given the investment horizon of 90 days Nasdaq is expected to generate 73.8 times less return on investment than ATMOS. But when comparing it to its historical volatility, Nasdaq Inc is 51.64 times less risky than ATMOS. It trades about 0.04 of its potential returns per unit of risk. ATMOS ENERGY P is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,614  in ATMOS ENERGY P on September 19, 2024 and sell it today you would earn a total of  121.00  from holding ATMOS ENERGY P or generate 1.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.52%
Values	Daily Returns

Nasdaq Inc  vs.  ATMOS ENERGY P

Nasdaq Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 uncertain 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 Nasdaq and ATMOS

The main advantage of trading using opposite Nasdaq and ATMOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.