Correlation Between Antero Resources and Exxon
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Exxon 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 Exxon 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 Exxon Mobil Corp, you can compare the effects of market volatilities on Antero Resources and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Exxon.
Diversification Opportunities for Antero Resources and Exxon
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antero and Exxon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Antero Resources i.e., Antero Resources and Exxon go up and down completely randomly.
Pair Corralation between Antero Resources and Exxon
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 2.04 times more return on investment than Exxon. However, Antero Resources is 2.04 times more volatile than Exxon Mobil Corp. It trades about 0.1 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.05 per unit of risk. If you would invest 2,202 in Antero Resources Corp on November 9, 2024 and sell it today you would earn a total of 1,628 from holding Antero Resources Corp or generate 73.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antero Resources Corp vs. Exxon Mobil Corp
Performance |
| Timeline |
| Antero Resources Corp |
| Exxon Mobil Corp |
Antero Resources and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antero Resources and Exxon
The main advantage of trading using opposite Antero Resources and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital Energy |
| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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