Correlation Between Safe Pro and Atmos Energy

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

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

Diversification Opportunities for Safe Pro and Atmos Energy

0.16

Correlation Coefficient

Safe Pro  Atmos Energy

Average diversification

The 3 months correlation between Safe and Atmos is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Safe Pro Group and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Safe Pro 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 Safe Pro Group 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 Safe Pro i.e., Safe Pro and Atmos Energy go up and down completely randomly.

Pair Corralation between Safe Pro and Atmos Energy

Given the investment horizon of 90 days Safe Pro Group is expected to generate 10.5 times more return on investment than Atmos Energy. However, Safe Pro is 10.5 times more volatile than Atmos Energy. It trades about 0.04 of its potential returns per unit of risk. Atmos Energy is currently generating about 0.05 per unit of risk. If you would invest  427.00  in Safe Pro Group on October 25, 2024 and sell it today you would lose (49.00) from holding Safe Pro Group or give up 11.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	20.28%
Values	Daily Returns

Safe Pro Group  vs.  Atmos Energy

Safe Pro Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Pro Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Safe Pro demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Atmos Energy

Risk-Adjusted Performance

1 of 100

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

Pair Trading with Safe Pro and Atmos Energy

The main advantage of trading using opposite Safe Pro and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Pro 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 Safe Pro Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.