Correlation Between Antero Resources and Epsilon Energy
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Epsilon 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 Epsilon 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 Epsilon Energy, you can compare the effects of market volatilities on Antero Resources and Epsilon 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 Epsilon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Epsilon Energy.
Diversification Opportunities for Antero Resources and Epsilon Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Antero and Epsilon is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Epsilon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon 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 Epsilon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Energy has no effect on the direction of Antero Resources i.e., Antero Resources and Epsilon Energy go up and down completely randomly.
Pair Corralation between Antero Resources and Epsilon Energy
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 1.35 times more return on investment than Epsilon Energy. However, Antero Resources is 1.35 times more volatile than Epsilon Energy. It trades about 0.04 of its potential returns per unit of risk. Epsilon Energy is currently generating about 0.02 per unit of risk. If you would invest 2,621 in Antero Resources Corp on August 26, 2024 and sell it today you would earn a total of 719.00 from holding Antero Resources Corp or generate 27.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. Epsilon Energy
Performance |
| Timeline |
| Antero Resources Corp |
| Epsilon Energy |
Antero Resources and Epsilon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Epsilon Energy
The main advantage of trading using opposite Antero Resources and Epsilon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Epsilon 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 Epsilon Energy will offset losses from the drop in Epsilon Energy's long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| Epsilon Energy vs. Vaalco Energy | Epsilon Energy vs. PHX Minerals | Epsilon Energy vs. Northern Oil Gas | Epsilon Energy vs. Granite Ridge Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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