Correlation Between Zumiez and ATMOS

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

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

Diversification Opportunities for Zumiez and ATMOS

0.02

Correlation Coefficient

Zumiez  ATMOS

Significant diversification

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

Pair Corralation between Zumiez and ATMOS

Given the investment horizon of 90 days Zumiez Inc is expected to generate 4.31 times more return on investment than ATMOS. However, Zumiez is 4.31 times more volatile than ATMOS ENERGY P. It trades about -0.1 of its potential returns per unit of risk. ATMOS ENERGY P is currently generating about -0.51 per unit of risk. If you would invest  2,147  in Zumiez Inc on September 21, 2024 and sell it today you would lose (248.00) from holding Zumiez Inc or give up 11.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.91%
Values	Daily Returns

Zumiez Inc  vs.  ATMOS ENERGY P

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 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 Zumiez and ATMOS

The main advantage of trading using opposite Zumiez and ATMOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumiez 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 Zumiez 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.