Correlation Between Antero Midstream and FLEX LNG
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and FLEX 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 FLEX 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 FLEX LNG, you can compare the effects of market volatilities on Antero Midstream and FLEX 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 FLEX LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and FLEX LNG.
Diversification Opportunities for Antero Midstream and FLEX LNG
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Antero and FLEX is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and FLEX LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEX LNG 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 FLEX LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEX LNG has no effect on the direction of Antero Midstream i.e., Antero Midstream and FLEX LNG go up and down completely randomly.
Pair Corralation between Antero Midstream and FLEX LNG
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 0.86 times more return on investment than FLEX LNG. However, Antero Midstream Partners is 1.17 times less risky than FLEX LNG. It trades about 0.09 of its potential returns per unit of risk. FLEX LNG is currently generating about 0.0 per unit of risk. If you would invest 935.00 in Antero Midstream Partners on August 27, 2024 and sell it today you would earn a total of 642.00 from holding Antero Midstream Partners or generate 68.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Midstream Partners vs. FLEX LNG
Performance |
| Timeline |
| Antero Midstream Partners |
| FLEX LNG |
Antero Midstream and FLEX LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and FLEX LNG
The main advantage of trading using opposite Antero Midstream and FLEX LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, FLEX 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 FLEX LNG will offset losses from the drop in FLEX LNG'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 |
| FLEX LNG vs. Ucommune International | FLEX LNG vs. Lion Financial Group | FLEX LNG vs. HUMANA INC | FLEX LNG vs. Aquagold International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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