Correlation Between Antero Midstream and Exxon
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Exxon 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 Exxon 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 Exxon Mobil Corp, you can compare the effects of market volatilities on Antero Midstream and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Exxon.
Diversification Opportunities for Antero Midstream and Exxon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Antero and Exxon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Antero Midstream i.e., Antero Midstream and Exxon go up and down completely randomly.
Pair Corralation between Antero Midstream and Exxon
Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.03 times more return on investment than Exxon. However, Antero Midstream is 1.03 times more volatile than Exxon Mobil Corp. It trades about 0.08 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.07 per unit of risk. If you would invest 1,249 in Antero Midstream Partners on August 26, 2024 and sell it today you would earn a total of 328.00 from holding Antero Midstream Partners or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Midstream Partners vs. Exxon Mobil Corp
Performance |
| Timeline |
| Antero Midstream Partners |
| Exxon Mobil Corp |
Antero Midstream and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Midstream and Exxon
The main advantage of trading using opposite Antero Midstream and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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