Correlation Between Snam SpA and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Snam SpA 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 Snam SpA and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snam SpA and Atmos Energy, you can compare the effects of market volatilities on Snam SpA 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 Snam SpA with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snam SpA and Atmos Energy.
Diversification Opportunities for Snam SpA and Atmos Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snam and Atmos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Snam SpA and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Snam SpA 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 Snam SpA 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 Snam SpA i.e., Snam SpA and Atmos Energy go up and down completely randomly.
Pair Corralation between Snam SpA and Atmos Energy
Assuming the 90 days horizon Snam SpA is expected to generate 0.68 times more return on investment than Atmos Energy. However, Snam SpA is 1.46 times less risky than Atmos Energy. It trades about -0.21 of its potential returns per unit of risk. Atmos Energy is currently generating about -0.31 per unit of risk. If you would invest 436.00 in Snam SpA on September 25, 2024 and sell it today you would lose (13.00) from holding Snam SpA or give up 2.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Snam SpA vs. Atmos Energy
Performance |
Timeline |
Snam SpA |
Atmos Energy |
Snam SpA and Atmos Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Snam SpA and Atmos Energy
The main advantage of trading using opposite Snam SpA and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snam SpA 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.Snam SpA vs. CenterPoint Energy | Snam SpA vs. Atmos Energy | Snam SpA vs. China Resources Gas | Snam SpA vs. APA Group |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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