Correlation Between Salesforce and Atmos Energy

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

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

Diversification Opportunities for Salesforce and Atmos Energy

-0.78

Correlation Coefficient

Salesforce  Atmos Energy

Pay attention - limited upside

The 3 months correlation between Salesforce and Atmos is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Salesforce 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 Salesforce are associated (or correlated) with Atmos Energy. 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 has no effect on the direction of Salesforce i.e., Salesforce and Atmos Energy go up and down completely randomly.

Pair Corralation between Salesforce and Atmos Energy

Considering the 90-day investment horizon Salesforce is expected to under-perform the Atmos Energy. In addition to that, Salesforce is 1.54 times more volatile than Atmos Energy. It trades about -0.16 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.14 per unit of volatility. If you would invest  13,813  in Atmos Energy on December 29, 2024 and sell it today you would earn a total of  1,433  from holding Atmos Energy or generate 10.37% return on investment over 90 days.

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

Salesforce  vs.  Atmos Energy

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Atmos Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Atmos Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Salesforce and Atmos Energy

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

The idea behind Salesforce and Atmos Energy 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 Stocks Directory module to find actively traded stocks across global markets.