Correlation Between Atmos Energy and Hafnia

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

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

Diversification Opportunities for Atmos Energy and Hafnia

-0.65

Correlation Coefficient

Atmos Energy  Hafnia

Excellent diversification

The 3 months correlation between Atmos and Hafnia is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Atmos Energy i.e., Atmos Energy and Hafnia go up and down completely randomly.

Pair Corralation between Atmos Energy and Hafnia

Considering the 90-day investment horizon Atmos Energy is expected to generate 0.4 times more return on investment than Hafnia. However, Atmos Energy is 2.5 times less risky than Hafnia. It trades about 0.13 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.12 per unit of risk. If you would invest  12,305  in Atmos Energy on September 21, 2024 and sell it today you would earn a total of  1,683  from holding Atmos Energy or generate 13.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Atmos Energy  vs.  Hafnia Limited

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 recent stock price disarray, may contribute to short-term losses for the investors.

Hafnia Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hafnia Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Atmos Energy and Hafnia

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

The idea behind Atmos Energy and Hafnia Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.