Correlation Between Antero Midstream and Healthy Choice

Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Healthy Choice 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 Antero Midstream and Healthy Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Antero Midstream Partners and Healthy Choice Wellness, you can compare the effects of market volatilities on Antero Midstream and Healthy Choice 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 Antero Midstream with a short position of Healthy Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Healthy Choice.

Diversification Opportunities for Antero Midstream and Healthy Choice

0.02

Correlation Coefficient

Antero Midstream  Healthy Choice

Significant diversification

The 3 months correlation between Antero and Healthy is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Healthy Choice Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthy Choice Wellness and Antero Midstream 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 Antero Midstream Partners are associated (or correlated) with Healthy Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthy Choice Wellness has no effect on the direction of Antero Midstream i.e., Antero Midstream and Healthy Choice go up and down completely randomly.

Pair Corralation between Antero Midstream and Healthy Choice

Allowing for the 90-day total investment horizon Antero Midstream is expected to generate 104.89 times less return on investment than Healthy Choice. But when comparing it to its historical volatility, Antero Midstream Partners is 83.1 times less risky than Healthy Choice. It trades about 0.08 of its potential returns per unit of risk. Healthy Choice Wellness is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Healthy Choice Wellness on October 11, 2024 and sell it today you would earn a total of  121.00  from holding Healthy Choice Wellness or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	16.53%
Values	Daily Returns

Antero Midstream Partners  vs.  Healthy Choice Wellness

Antero Midstream Partners

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Antero Midstream is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Healthy Choice Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthy Choice Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Antero Midstream and Healthy Choice

The main advantage of trading using opposite Antero Midstream and Healthy Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Healthy Choice 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 Healthy Choice will offset losses from the drop in Healthy Choice's long position.

The idea behind Antero Midstream Partners and Healthy Choice Wellness 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.