Correlation Between Antero Midstream and International Seaways
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and International Seaways 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 International Seaways 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 International Seaways, you can compare the effects of market volatilities on Antero Midstream and International Seaways 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 International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and International Seaways.
Diversification Opportunities for Antero Midstream and International Seaways
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Antero and International is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways 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 International Seaways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Seaways has no effect on the direction of Antero Midstream i.e., Antero Midstream and International Seaways go up and down completely randomly.
Pair Corralation between Antero Midstream and International Seaways
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.1 times more return on investment than International Seaways. However, Antero Midstream is 1.1 times more volatile than International Seaways. It trades about 0.16 of its potential returns per unit of risk. International Seaways is currently generating about -0.28 per unit of risk. If you would invest 1,488 in Antero Midstream Partners on August 28, 2024 and sell it today you would earn a total of 80.00 from holding Antero Midstream Partners or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Midstream Partners vs. International Seaways
Performance |
| Timeline |
| Antero Midstream Partners |
| International Seaways |
Antero Midstream and International Seaways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and International Seaways
The main advantage of trading using opposite Antero Midstream and International Seaways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, International Seaways 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 International Seaways will offset losses from the drop in International Seaways' 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 |
| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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