Correlation Between Antero Resources and Hess
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Hess 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 Hess 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 Hess Corporation, you can compare the effects of market volatilities on Antero Resources and Hess 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 Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Hess.
Diversification Opportunities for Antero Resources and Hess
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Antero and Hess is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess 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 Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of Antero Resources i.e., Antero Resources and Hess go up and down completely randomly.
Pair Corralation between Antero Resources and Hess
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 3.56 times more return on investment than Hess. However, Antero Resources is 3.56 times more volatile than Hess Corporation. It trades about 0.27 of its potential returns per unit of risk. Hess Corporation is currently generating about 0.4 per unit of risk. If you would invest 2,741 in Antero Resources Corp on August 27, 2024 and sell it today you would earn a total of 570.00 from holding Antero Resources Corp or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. Hess Corp.
Performance |
| Timeline |
| Antero Resources Corp |
| Hess |
Antero Resources and Hess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Hess
The main advantage of trading using opposite Antero Resources and Hess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Hess 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 Hess will offset losses from the drop in Hess' long position.| Antero Resources vs. Devon Energy | Antero Resources vs. ConocoPhillips | Antero Resources vs. Occidental Petroleum | Antero Resources vs. Permian 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |