Correlation Between Epsilon Energy and Antero Resources
Can any of the company-specific risk be diversified away by investing in both Epsilon Energy and Antero Resources 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 Epsilon Energy and Antero Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Energy and Antero Resources Corp, you can compare the effects of market volatilities on Epsilon Energy and Antero Resources 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 Epsilon Energy with a short position of Antero Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Energy and Antero Resources.
Diversification Opportunities for Epsilon Energy and Antero Resources
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Epsilon and Antero is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Energy and Antero Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antero Resources Corp and Epsilon 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 Epsilon Energy are associated (or correlated) with Antero Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antero Resources Corp has no effect on the direction of Epsilon Energy i.e., Epsilon Energy and Antero Resources go up and down completely randomly.
Pair Corralation between Epsilon Energy and Antero Resources
Given the investment horizon of 90 days Epsilon Energy is expected to under-perform the Antero Resources. But the stock apears to be less risky and, when comparing its historical volatility, Epsilon Energy is 1.38 times less risky than Antero Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Antero Resources Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,741 in Antero Resources Corp on August 29, 2024 and sell it today you would earn a total of 507.00 from holding Antero Resources Corp or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epsilon Energy vs. Antero Resources Corp
Performance |
| Timeline |
| Epsilon Energy |
| Antero Resources Corp |
Epsilon Energy and Antero Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Energy and Antero Resources
The main advantage of trading using opposite Epsilon Energy and Antero Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Energy position performs unexpectedly, Antero Resources 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 Resources will offset losses from the drop in Antero Resources' long position.| Epsilon Energy vs. Vaalco Energy | Epsilon Energy vs. PHX Minerals | Epsilon Energy vs. Northern Oil Gas | Epsilon Energy vs. Granite Ridge Resources |
| Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources | Antero Resources vs. Diamondback Energy | Antero Resources vs. Vital 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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