Correlation Between Antero Midstream and Nuvation Bio

Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Nuvation Bio 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 Nuvation Bio 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 Nuvation Bio, you can compare the effects of market volatilities on Antero Midstream and Nuvation Bio 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 Nuvation Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Nuvation Bio.

Diversification Opportunities for Antero Midstream and Nuvation Bio

-0.25

Correlation Coefficient

Antero Midstream  Nuvation Bio

Very good diversification

The 3 months correlation between Antero and Nuvation is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Nuvation Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvation Bio 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 Nuvation Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvation Bio has no effect on the direction of Antero Midstream i.e., Antero Midstream and Nuvation Bio go up and down completely randomly.

Pair Corralation between Antero Midstream and Nuvation Bio

Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 0.28 times more return on investment than Nuvation Bio. However, Antero Midstream Partners is 3.55 times less risky than Nuvation Bio. It trades about 0.13 of its potential returns per unit of risk. Nuvation Bio is currently generating about 0.01 per unit of risk. If you would invest  1,434  in Antero Midstream Partners on September 3, 2024 and sell it today you would earn a total of  163.00  from holding Antero Midstream Partners or generate 11.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Antero Midstream Partners  vs.  Nuvation Bio

Antero Midstream Partners

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Antero Midstream may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuvation Bio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvation Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nuvation Bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Antero Midstream and Nuvation Bio

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

The idea behind Antero Midstream Partners and Nuvation Bio 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.