Correlation Between Cadiz Depositary and Atmos Energy

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

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

Diversification Opportunities for Cadiz Depositary and Atmos Energy

0.37

Correlation Coefficient

Cadiz Depositary  Atmos Energy

Weak diversification

The 3 months correlation between Cadiz and Atmos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cadiz Depositary Shares and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Cadiz Depositary 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 Cadiz Depositary Shares 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 Cadiz Depositary i.e., Cadiz Depositary and Atmos Energy go up and down completely randomly.

Pair Corralation between Cadiz Depositary and Atmos Energy

Assuming the 90 days horizon Cadiz Depositary Shares is expected to generate 1.29 times more return on investment than Atmos Energy. However, Cadiz Depositary is 1.29 times more volatile than Atmos Energy. It trades about 0.01 of its potential returns per unit of risk. Atmos Energy is currently generating about -0.04 per unit of risk. If you would invest  1,729  in Cadiz Depositary Shares on May 3, 2025 and sell it today you would earn a total of  0.00  from holding Cadiz Depositary Shares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Cadiz Depositary Shares  vs.  Atmos Energy

Cadiz Depositary Shares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cadiz Depositary Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Cadiz Depositary is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Atmos Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atmos Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Atmos Energy is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cadiz Depositary and Atmos Energy

The main advantage of trading using opposite Cadiz Depositary and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadiz Depositary 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 Cadiz Depositary Shares 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.