Correlation Between Atmos Energy and Auddia

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

By analyzing existing cross correlation between Atmos Energy and Auddia Inc, you can compare the effects of market volatilities on Atmos Energy and Auddia 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 Auddia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Auddia.

Diversification Opportunities for Atmos Energy and Auddia

-0.09

Correlation Coefficient

Atmos Energy  Auddia

Good diversification

The 3 months correlation between Atmos and Auddia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Auddia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auddia Inc 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 Auddia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auddia Inc has no effect on the direction of Atmos Energy i.e., Atmos Energy and Auddia go up and down completely randomly.

Pair Corralation between Atmos Energy and Auddia

Considering the 90-day investment horizon Atmos Energy is expected to under-perform the Auddia. But the stock apears to be less risky and, when comparing its historical volatility, Atmos Energy is 15.76 times less risky than Auddia. The stock trades about -0.03 of its potential returns per unit of risk. The Auddia Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Auddia Inc on October 8, 2024 and sell it today you would earn a total of  0.18  from holding Auddia Inc or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.0%
Values	Daily Returns

Atmos Energy  vs.  Auddia Inc

Atmos Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Atmos Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Auddia Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auddia Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atmos Energy and Auddia

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

The idea behind Atmos Energy and Auddia Inc 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.