Correlation Between SandRidge Energy and Antero Resources
Can any of the company-specific risk be diversified away by investing in both SandRidge 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 SandRidge 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 SandRidge Energy and Antero Resources Corp, you can compare the effects of market volatilities on SandRidge 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 SandRidge Energy with a short position of Antero Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Antero Resources.
Diversification Opportunities for SandRidge Energy and Antero Resources
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SandRidge and Antero is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge 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 SandRidge 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 SandRidge 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 SandRidge Energy i.e., SandRidge Energy and Antero Resources go up and down completely randomly.
Pair Corralation between SandRidge Energy and Antero Resources
Allowing for the 90-day total investment horizon SandRidge Energy is expected to generate 2.79 times less return on investment than Antero Resources. But when comparing it to its historical volatility, SandRidge Energy is 1.8 times less risky than Antero Resources. It trades about 0.18 of its potential returns per unit of risk. Antero Resources Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,741 in Antero Resources Corp on August 28, 2024 and sell it today you would earn a total of 582.00 from holding Antero Resources Corp or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Antero Resources Corp
Performance |
| Timeline |
| SandRidge Energy |
| Antero Resources Corp |
SandRidge Energy and Antero Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Antero Resources
The main advantage of trading using opposite SandRidge Energy and Antero Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge 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.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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