Correlation Between Antero Resources and PHX Minerals
Can any of the company-specific risk be diversified away by investing in both Antero Resources and PHX Minerals 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 PHX Minerals 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 PHX Minerals, you can compare the effects of market volatilities on Antero Resources and PHX Minerals 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 PHX Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and PHX Minerals.
Diversification Opportunities for Antero Resources and PHX Minerals
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Antero and PHX is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and PHX Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Minerals 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 PHX Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Minerals has no effect on the direction of Antero Resources i.e., Antero Resources and PHX Minerals go up and down completely randomly.
Pair Corralation between Antero Resources and PHX Minerals
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 2.21 times more return on investment than PHX Minerals. However, Antero Resources is 2.21 times more volatile than PHX Minerals. It trades about 0.15 of its potential returns per unit of risk. PHX Minerals is currently generating about -0.1 per unit of risk. If you would invest 3,505 in Antero Resources Corp on November 1, 2024 and sell it today you would earn a total of 280.00 from holding Antero Resources Corp or generate 7.99% 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. PHX Minerals
Performance |
| Timeline |
| Antero Resources Corp |
| PHX Minerals |
Antero Resources and PHX Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and PHX Minerals
The main advantage of trading using opposite Antero Resources and PHX Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, PHX Minerals 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 PHX Minerals will offset losses from the drop in PHX Minerals' long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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