Correlation Between Antero Midstream and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings, you can compare the effects of market volatilities on Antero Midstream and Kenon Holdings 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Kenon Holdings.
Diversification Opportunities for Antero Midstream and Kenon Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Antero and Kenon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Antero Midstream i.e., Antero Midstream and Kenon Holdings go up and down completely randomly.
Pair Corralation between Antero Midstream and Kenon Holdings
Allowing for the 90-day total investment horizon Antero Midstream is expected to generate 2.55 times less return on investment than Kenon Holdings. But when comparing it to its historical volatility, Antero Midstream Partners is 1.77 times less risky than Kenon Holdings. It trades about 0.08 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,606 in Kenon Holdings on October 21, 2024 and sell it today you would earn a total of 1,731 from holding Kenon Holdings or generate 107.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Midstream Partners vs. Kenon Holdings
Performance |
| Timeline |
| Antero Midstream Partners |
| Kenon Holdings |
Antero Midstream and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and Kenon Holdings
The main advantage of trading using opposite Antero Midstream and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' 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 |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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