Correlation Between Brooge Energy and Antero Midstream
Can any of the company-specific risk be diversified away by investing in both Brooge Energy and Antero Midstream 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 Brooge Energy and Antero Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooge Energy Limited and Antero Midstream Partners, you can compare the effects of market volatilities on Brooge Energy and Antero Midstream 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 Brooge Energy with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Energy and Antero Midstream.
Diversification Opportunities for Brooge Energy and Antero Midstream
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brooge and Antero is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Energy Limited and Antero Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antero Midstream Partners and Brooge Energy 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 Brooge Energy Limited are associated (or correlated) with Antero Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antero Midstream Partners has no effect on the direction of Brooge Energy i.e., Brooge Energy and Antero Midstream go up and down completely randomly.
Pair Corralation between Brooge Energy and Antero Midstream
Assuming the 90 days horizon Brooge Energy Limited is expected to generate 27.4 times more return on investment than Antero Midstream. However, Brooge Energy is 27.4 times more volatile than Antero Midstream Partners. It trades about 0.29 of its potential returns per unit of risk. Antero Midstream Partners is currently generating about 0.19 per unit of risk. If you would invest 0.11 in Brooge Energy Limited on August 24, 2024 and sell it today you would earn a total of 0.15 from holding Brooge Energy Limited or generate 136.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Brooge Energy Limited vs. Antero Midstream Partners
Performance |
| Timeline |
| Brooge Energy Limited |
| Antero Midstream Partners |
Brooge Energy and Antero Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brooge Energy and Antero Midstream
The main advantage of trading using opposite Brooge Energy and Antero Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Energy position performs unexpectedly, Antero Midstream 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 Antero Midstream will offset losses from the drop in Antero Midstream's long position.The idea behind Brooge Energy Limited and Antero Midstream Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. MPLX LP | Antero Midstream vs. Hess Midstream Partners | Antero Midstream vs. Plains All American |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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