Correlation Between Enlight Renewable and Atmos Energy

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

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

Diversification Opportunities for Enlight Renewable and Atmos Energy

0.23

Correlation Coefficient

Enlight Renewable  Atmos Energy

Modest diversification

The 3 months correlation between Enlight and Atmos is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Enlight Renewable 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 Enlight Renewable Energy 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 Enlight Renewable i.e., Enlight Renewable and Atmos Energy go up and down completely randomly.

Pair Corralation between Enlight Renewable and Atmos Energy

Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 2.18 times more return on investment than Atmos Energy. However, Enlight Renewable is 2.18 times more volatile than Atmos Energy. It trades about 0.1 of its potential returns per unit of risk. Atmos Energy is currently generating about 0.21 per unit of risk. If you would invest  1,606  in Enlight Renewable Energy on December 5, 2024 and sell it today you would earn a total of  74.00  from holding Enlight Renewable Energy or generate 4.61% return on investment over 90 days.

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

Enlight Renewable Energy  vs.  Atmos Energy

Enlight Renewable Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting essential indicators, Enlight Renewable may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Atmos Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 6 (%) 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.

Pair Trading with Enlight Renewable and Atmos Energy

The main advantage of trading using opposite Enlight Renewable and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable 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 Enlight Renewable Energy 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.