Correlation Between One Gas and Atmos Energy

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

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

Diversification Opportunities for One Gas and Atmos Energy

0.98

Correlation Coefficient

One Gas  Atmos Energy

Almost no diversification

The 3 months correlation between One and Atmos is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding One Gas and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and One Gas 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 One Gas 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 One Gas i.e., One Gas and Atmos Energy go up and down completely randomly.

Pair Corralation between One Gas and Atmos Energy

Considering the 90-day investment horizon One Gas is expected to under-perform the Atmos Energy. But the stock apears to be less risky and, when comparing its historical volatility, One Gas is 1.01 times less risky than Atmos Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Atmos Energy is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,992  in Atmos Energy on January 7, 2025 and sell it today you would lose (211.00) from holding Atmos Energy or give up 1.41% of portfolio value over 90 days.

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

One Gas  vs.  Atmos Energy

One Gas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One Gas are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, One Gas may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Atmos Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atmos Energy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Atmos Energy may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with One Gas and Atmos Energy

The main advantage of trading using opposite One Gas and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Gas 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 One Gas 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.