Correlation Between ATMOS and Carters

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

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

Diversification Opportunities for ATMOS and Carters

-0.49

Correlation Coefficient

ATMOS  Carters

Very good diversification

The 3 months correlation between ATMOS and Carters is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ATMOS ENERGY P and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters and ATMOS 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 P are associated (or correlated) with Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of ATMOS i.e., ATMOS and Carters go up and down completely randomly.

Pair Corralation between ATMOS and Carters

Assuming the 90 days trading horizon ATMOS ENERGY P is expected to under-perform the Carters. But the bond apears to be less risky and, when comparing its historical volatility, ATMOS ENERGY P is 2.35 times less risky than Carters. The bond trades about -0.24 of its potential returns per unit of risk. The Carters is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  6,570  in Carters on September 26, 2024 and sell it today you would lose (1,019) from holding Carters or give up 15.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	41.27%
Values	Daily Returns

ATMOS ENERGY P  vs.  Carters

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 unsteady 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.

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ATMOS and Carters

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

The idea behind ATMOS ENERGY P and Carters 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..