Correlation Between Antero Midstream and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Antero Midstream and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and FTAI Aviation.
Diversification Opportunities for Antero Midstream and FTAI Aviation
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and FTAI is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Antero Midstream i.e., Antero Midstream and FTAI Aviation go up and down completely randomly.
Pair Corralation between Antero Midstream and FTAI Aviation
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.05 times more return on investment than FTAI Aviation. However, Antero Midstream is 1.05 times more volatile than FTAI Aviation Ltd. It trades about 0.08 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.05 per unit of risk. If you would invest 955.00 in Antero Midstream Partners on August 24, 2024 and sell it today you would earn a total of 622.00 from holding Antero Midstream Partners or generate 65.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.1% |
| Values | Daily Returns |
Antero Midstream Partners vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Antero Midstream Partners |
| FTAI Aviation |
Antero Midstream and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and FTAI Aviation
The main advantage of trading using opposite Antero Midstream and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. Williams Companies | Antero Midstream vs. Enterprise Products Partners | Antero Midstream vs. ONEOK Inc |
| FTAI Aviation vs. Antero Midstream Partners | FTAI Aviation vs. BRP Inc | FTAI Aviation vs. Canlan Ice Sports | FTAI Aviation vs. Alliant Energy 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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