Correlation Between Antero Resources and Kosmos Energy
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Kosmos 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 Kosmos 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 Kosmos Energy, you can compare the effects of market volatilities on Antero Resources and Kosmos 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 Kosmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Kosmos Energy.
Diversification Opportunities for Antero Resources and Kosmos Energy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Antero and Kosmos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Kosmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kosmos 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 Kosmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kosmos Energy has no effect on the direction of Antero Resources i.e., Antero Resources and Kosmos Energy go up and down completely randomly.
Pair Corralation between Antero Resources and Kosmos Energy
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 1.11 times more return on investment than Kosmos Energy. However, Antero Resources is 1.11 times more volatile than Kosmos Energy. It trades about 0.23 of its potential returns per unit of risk. Kosmos Energy is currently generating about -0.01 per unit of risk. If you would invest 2,741 in Antero Resources Corp on August 29, 2024 and sell it today you would earn a total of 507.00 from holding Antero Resources Corp or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. Kosmos Energy
Performance |
| Timeline |
| Antero Resources Corp |
| Kosmos Energy |
Antero Resources and Kosmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Kosmos Energy
The main advantage of trading using opposite Antero Resources and Kosmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Kosmos 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 Kosmos Energy will offset losses from the drop in Kosmos Energy's long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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