Correlation Between Antero Midstream and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Dynagas LNG 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 Antero Midstream and Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antero Midstream Partners and Dynagas LNG Partners, you can compare the effects of market volatilities on Antero Midstream and Dynagas LNG 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 Antero Midstream with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Dynagas LNG.
Diversification Opportunities for Antero Midstream and Dynagas LNG
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and Dynagas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Dynagas LNG Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagas LNG Partners and Antero Midstream 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 Antero Midstream Partners are associated (or correlated) with Dynagas LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagas LNG Partners has no effect on the direction of Antero Midstream i.e., Antero Midstream and Dynagas LNG go up and down completely randomly.
Pair Corralation between Antero Midstream and Dynagas LNG
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 2.97 times more return on investment than Dynagas LNG. However, Antero Midstream is 2.97 times more volatile than Dynagas LNG Partners. It trades about 0.08 of its potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.06 per unit of risk. If you would invest 1,404 in Antero Midstream Partners on August 24, 2024 and sell it today you would earn a total of 174.00 from holding Antero Midstream Partners or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Midstream Partners vs. Dynagas LNG Partners
Performance |
| Timeline |
| Antero Midstream Partners |
| Dynagas LNG Partners |
Antero Midstream and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and Dynagas LNG
The main advantage of trading using opposite Antero Midstream and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Dynagas LNG 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 Dynagas LNG will offset losses from the drop in Dynagas LNG's long position.| Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. MPLX LP | Antero Midstream vs. Hess Midstream Partners | Antero Midstream vs. Plains All American |
| Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Dynagas LNG Partners | Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Seapeak LLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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