Correlation Between Antero Resources and Coterra Energy
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Coterra Energy 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 Resources and Coterra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antero Resources Corp and Coterra Energy, you can compare the effects of market volatilities on Antero Resources and Coterra Energy 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 Resources with a short position of Coterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Coterra Energy.
Diversification Opportunities for Antero Resources and Coterra Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Antero and Coterra is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Coterra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coterra Energy and Antero Resources 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 Resources Corp are associated (or correlated) with Coterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coterra Energy has no effect on the direction of Antero Resources i.e., Antero Resources and Coterra Energy go up and down completely randomly.
Pair Corralation between Antero Resources and Coterra Energy
Allowing for the 90-day total investment horizon Antero Resources is expected to generate 1.1 times less return on investment than Coterra Energy. In addition to that, Antero Resources is 1.62 times more volatile than Coterra Energy. It trades about 0.1 of its total potential returns per unit of risk. Coterra Energy is currently generating about 0.17 per unit of volatility. If you would invest 2,614 in Coterra Energy on November 3, 2024 and sell it today you would earn a total of 158.00 from holding Coterra Energy or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. Coterra Energy
Performance |
| Timeline |
| Antero Resources Corp |
| Coterra Energy |
Antero Resources and Coterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Coterra Energy
The main advantage of trading using opposite Antero Resources and Coterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Coterra Energy 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 Coterra Energy will offset losses from the drop in Coterra Energy's long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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