Correlation Between Magna International and Antero Midstream
Can any of the company-specific risk be diversified away by investing in both Magna International 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 Magna International and Antero Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and Antero Midstream Partners, you can compare the effects of market volatilities on Magna International 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 Magna International with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and Antero Midstream.
Diversification Opportunities for Magna International and Antero Midstream
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magna and Antero is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Magna International 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 Magna International 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 Magna International 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 Magna International i.e., Magna International and Antero Midstream go up and down completely randomly.
Pair Corralation between Magna International and Antero Midstream
Considering the 90-day investment horizon Magna International is expected to under-perform the Antero Midstream. In addition to that, Magna International is 1.55 times more volatile than Antero Midstream Partners. It trades about -0.02 of its total potential returns per unit of risk. Antero Midstream Partners is currently generating about 0.1 per unit of volatility. If you would invest 1,192 in Antero Midstream Partners on September 2, 2024 and sell it today you would earn a total of 405.00 from holding Antero Midstream Partners or generate 33.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna International vs. Antero Midstream Partners
Performance |
| Timeline |
| Magna International |
| Antero Midstream Partners |
Magna International and Antero Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna International and Antero Midstream
The main advantage of trading using opposite Magna International and Antero Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International 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.| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
| Antero Midstream vs. EnLink Midstream LLC | Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. Plains GP Holdings | 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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