Correlation Between NiSource and Antero Midstream
Can any of the company-specific risk be diversified away by investing in both NiSource 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 NiSource and Antero Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Antero Midstream Partners, you can compare the effects of market volatilities on NiSource 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 NiSource with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Antero Midstream.
Diversification Opportunities for NiSource and Antero Midstream
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NiSource and Antero is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NiSource 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 NiSource 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 NiSource 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 NiSource i.e., NiSource and Antero Midstream go up and down completely randomly.
Pair Corralation between NiSource and Antero Midstream
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.72 times more return on investment than Antero Midstream. However, NiSource is 1.38 times less risky than Antero Midstream. It trades about 0.36 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 3,487 in NiSource on August 29, 2024 and sell it today you would earn a total of 338.00 from holding NiSource or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Antero Midstream Partners
Performance |
| Timeline |
| NiSource |
| Antero Midstream Partners |
NiSource and Antero Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Antero Midstream
The main advantage of trading using opposite NiSource and Antero Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource 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.| NiSource vs. NewJersey Resources | NiSource vs. UGI Corporation | NiSource vs. Spire Inc | NiSource vs. Chesapeake Utilities |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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