Correlation Between Antero Resources and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Ultrapar Participacoes 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 Ultrapar Participacoes 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 Ultrapar Participacoes SA, you can compare the effects of market volatilities on Antero Resources and Ultrapar Participacoes 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 Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Ultrapar Participacoes.
Diversification Opportunities for Antero Resources and Ultrapar Participacoes
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antero and Ultrapar is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes 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 Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Antero Resources i.e., Antero Resources and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Antero Resources and Ultrapar Participacoes
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 0.93 times more return on investment than Ultrapar Participacoes. However, Antero Resources Corp is 1.08 times less risky than Ultrapar Participacoes. It trades about 0.2 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.12 per unit of risk. If you would invest 2,923 in Antero Resources Corp on November 8, 2024 and sell it today you would earn a total of 1,037 from holding Antero Resources Corp or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Antero Resources Corp vs. Ultrapar Participacoes SA
Performance |
| Timeline |
| Antero Resources Corp |
| Ultrapar Participacoes |
Antero Resources and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Ultrapar Participacoes
The main advantage of trading using opposite Antero Resources and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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