Correlation Between Antero Midstream and Enbridge
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Enbridge 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 Enbridge 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 Enbridge, you can compare the effects of market volatilities on Antero Midstream and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Enbridge.
Diversification Opportunities for Antero Midstream and Enbridge
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and Enbridge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Antero Midstream i.e., Antero Midstream and Enbridge go up and down completely randomly.
Pair Corralation between Antero Midstream and Enbridge
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.23 times more return on investment than Enbridge. However, Antero Midstream is 1.23 times more volatile than Enbridge. It trades about 0.09 of its potential returns per unit of risk. Enbridge is currently generating about 0.05 per unit of risk. If you would invest 934.00 in Antero Midstream Partners on August 27, 2024 and sell it today you would earn a total of 634.00 from holding Antero Midstream Partners or generate 67.88% 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. Enbridge
Performance |
| Timeline |
| Antero Midstream Partners |
| Enbridge |
Antero Midstream and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and Enbridge
The main advantage of trading using opposite Antero Midstream and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Antero Midstream vs. EnLink Midstream LLC | Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. Plains GP Holdings | Antero Midstream vs. Plains All American |
| Enbridge vs. Energy Transfer LP | Enbridge vs. Kinder Morgan | Enbridge vs. MPLX LP | Enbridge vs. Pembina Pipeline Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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