Correlation Between Antero Midstream and NiSource
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and NiSource 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 NiSource 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 NiSource, you can compare the effects of market volatilities on Antero Midstream and NiSource 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 NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and NiSource.
Diversification Opportunities for Antero Midstream and NiSource
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and NiSource is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource 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 NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of Antero Midstream i.e., Antero Midstream and NiSource go up and down completely randomly.
Pair Corralation between Antero Midstream and NiSource
Allowing for the 90-day total investment horizon Antero Midstream is expected to generate 1.4 times less return on investment than NiSource. In addition to that, Antero Midstream is 1.38 times more volatile than NiSource. It trades about 0.19 of its total potential returns per unit of risk. NiSource is currently generating about 0.36 per unit of volatility. If you would invest 3,487 in NiSource on August 29, 2024 and sell it today you would earn a total of 338.00 from holding NiSource or generate 9.69% 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. NiSource
Performance |
| Timeline |
| Antero Midstream Partners |
| NiSource |
Antero Midstream and NiSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and NiSource
The main advantage of trading using opposite Antero Midstream and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, NiSource 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 NiSource will offset losses from the drop in NiSource'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 |
| NiSource vs. NewJersey Resources | NiSource vs. UGI Corporation | NiSource vs. Spire Inc | NiSource vs. Chesapeake Utilities |
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 CEOs Directory module to screen CEOs from public companies around the world.
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