Correlation Between Antero Resources and LandBridge Company
Can any of the company-specific risk be diversified away by investing in both Antero Resources and LandBridge Company 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 LandBridge Company 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 LandBridge Company LLC, you can compare the effects of market volatilities on Antero Resources and LandBridge Company 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 LandBridge Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and LandBridge Company.
Diversification Opportunities for Antero Resources and LandBridge Company
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and LandBridge is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and LandBridge Company LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandBridge Company 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 LandBridge Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandBridge Company has no effect on the direction of Antero Resources i.e., Antero Resources and LandBridge Company go up and down completely randomly.
Pair Corralation between Antero Resources and LandBridge Company
Allowing for the 90-day total investment horizon Antero Resources is expected to generate 1.21 times less return on investment than LandBridge Company. But when comparing it to its historical volatility, Antero Resources Corp is 1.49 times less risky than LandBridge Company. It trades about 0.3 of its potential returns per unit of risk. LandBridge Company LLC is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,269 in LandBridge Company LLC on August 24, 2024 and sell it today you would earn a total of 1,476 from holding LandBridge Company LLC or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. LandBridge Company LLC
Performance |
| Timeline |
| Antero Resources Corp |
| LandBridge Company |
Antero Resources and LandBridge Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and LandBridge Company
The main advantage of trading using opposite Antero Resources and LandBridge Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, LandBridge Company 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 LandBridge Company will offset losses from the drop in LandBridge Company's long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| LandBridge Company vs. Antero Resources Corp | LandBridge Company vs. Empire Petroleum Corp | LandBridge Company vs. Permian Resources | LandBridge Company vs. SandRidge Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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