Correlation Between MOLSON RS and Atmos Energy

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

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

Diversification Opportunities for MOLSON RS and Atmos Energy

0.42

Correlation Coefficient

MOLSON RS  Atmos Energy

Very weak diversification

The 3 months correlation between MOLSON and Atmos is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MOLSON RS BEVERAGE and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and MOLSON RS 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 MOLSON RS BEVERAGE 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 MOLSON RS i.e., MOLSON RS and Atmos Energy go up and down completely randomly.

Pair Corralation between MOLSON RS and Atmos Energy

Assuming the 90 days trading horizon MOLSON RS BEVERAGE is expected to under-perform the Atmos Energy. In addition to that, MOLSON RS is 2.42 times more volatile than Atmos Energy. It trades about -0.01 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.05 per unit of volatility. If you would invest  10,291  in Atmos Energy on October 26, 2024 and sell it today you would earn a total of  3,024  from holding Atmos Energy or generate 29.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

MOLSON RS BEVERAGE  vs.  Atmos Energy

MOLSON RS BEVERAGE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOLSON RS BEVERAGE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MOLSON RS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Atmos Energy

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Atmos Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MOLSON RS and Atmos Energy

The main advantage of trading using opposite MOLSON RS and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOLSON RS 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 MOLSON RS BEVERAGE 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 Transaction History module to view history of all your transactions and understand their impact on performance.