Correlation Between Antero Midstream and Perceptive Capital

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

Diversification Opportunities for Antero Midstream and Perceptive Capital

0.41

Correlation Coefficient

Antero Midstream  Perceptive Capital

Very weak diversification

The 3 months correlation between Antero and Perceptive is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Perceptive Capital Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perceptive Capital 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 Perceptive Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perceptive Capital has no effect on the direction of Antero Midstream i.e., Antero Midstream and Perceptive Capital go up and down completely randomly.

Pair Corralation between Antero Midstream and Perceptive Capital

Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 10.67 times more return on investment than Perceptive Capital. However, Antero Midstream is 10.67 times more volatile than Perceptive Capital Solutions. It trades about 0.11 of its potential returns per unit of risk. Perceptive Capital Solutions is currently generating about 0.12 per unit of risk. If you would invest  1,501  in Antero Midstream Partners on October 25, 2024 and sell it today you would earn a total of  149.50  from holding Antero Midstream Partners or generate 9.96% return on investment over 90 days.

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

Antero Midstream Partners  vs.  Perceptive Capital Solutions

Antero Midstream Partners

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Antero Midstream may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Perceptive Capital

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Perceptive Capital Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Perceptive Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Antero Midstream and Perceptive Capital

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

The idea behind Antero Midstream Partners and Perceptive Capital Solutions 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.