Correlation Between Atmos Energy and Snam SpA
Can any of the company-specific risk be diversified away by investing in both Atmos Energy and Snam SpA 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 Energy and Snam SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Snam SpA, you can compare the effects of market volatilities on Atmos Energy and Snam SpA 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 Energy with a short position of Snam SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Snam SpA.
Diversification Opportunities for Atmos Energy and Snam SpA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atmos and Snam is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Snam SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA and Atmos Energy 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 are associated (or correlated) with Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA has no effect on the direction of Atmos Energy i.e., Atmos Energy and Snam SpA go up and down completely randomly.
Pair Corralation between Atmos Energy and Snam SpA
Assuming the 90 days horizon Atmos Energy is expected to generate 2.85 times less return on investment than Snam SpA. In addition to that, Atmos Energy is 1.13 times more volatile than Snam SpA. It trades about 0.05 of its total potential returns per unit of risk. Snam SpA is currently generating about 0.16 per unit of volatility. If you would invest 415.00 in Snam SpA on December 28, 2024 and sell it today you would earn a total of 50.00 from holding Snam SpA or generate 12.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Atmos Energy vs. Snam SpA
Performance |
Timeline |
Atmos Energy |
Snam SpA |
Atmos Energy and Snam SpA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atmos Energy and Snam SpA
The main advantage of trading using opposite Atmos Energy and Snam SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy position performs unexpectedly, Snam SpA 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 Snam SpA will offset losses from the drop in Snam SpA's long position.Atmos Energy vs. EAT WELL INVESTMENT | Atmos Energy vs. EBRO FOODS | Atmos Energy vs. SENECA FOODS A | Atmos Energy vs. Austevoll Seafood ASA |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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