Correlation Between Antero Midstream and South Jersey
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and South Jersey 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 South Jersey 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 South Jersey Industries, you can compare the effects of market volatilities on Antero Midstream and South Jersey 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 South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and South Jersey.
Diversification Opportunities for Antero Midstream and South Jersey
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antero and South is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and South Jersey Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Jersey Industries 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 South Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Jersey Industries has no effect on the direction of Antero Midstream i.e., Antero Midstream and South Jersey go up and down completely randomly.
Pair Corralation between Antero Midstream and South Jersey
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 4.02 times more return on investment than South Jersey. However, Antero Midstream is 4.02 times more volatile than South Jersey Industries. It trades about 0.08 of its potential returns per unit of risk. South Jersey Industries is currently generating about -0.11 per unit of risk. If you would invest 951.00 in Antero Midstream Partners on September 14, 2024 and sell it today you would earn a total of 568.00 from holding Antero Midstream Partners or generate 59.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.31% |
| Values | Daily Returns |
Antero Midstream Partners vs. South Jersey Industries
Performance |
| Timeline |
| Antero Midstream Partners |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Antero Midstream and South Jersey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and South Jersey
The main advantage of trading using opposite Antero Midstream and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, South Jersey 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 South Jersey will offset losses from the drop in South Jersey'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 |
| South Jersey vs. Nok Airlines Public | South Jersey vs. Enlight Renewable Energy | South Jersey vs. Antero Midstream Partners | South Jersey vs. Mesa Air Group |
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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