Correlation Between Antero Midstream and Uber Technologies

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

Diversification Opportunities for Antero Midstream and Uber Technologies

-0.09

Correlation Coefficient

Antero Midstream  Uber Technologies

Good diversification

The 3 months correlation between Antero and Uber is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Antero Midstream i.e., Antero Midstream and Uber Technologies go up and down completely randomly.

Pair Corralation between Antero Midstream and Uber Technologies

Allowing for the 90-day total investment horizon Antero Midstream is expected to generate 1.26 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Antero Midstream Partners is 1.7 times less risky than Uber Technologies. It trades about 0.43 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  6,156  in Uber Technologies on October 26, 2024 and sell it today you would earn a total of  674.00  from holding Uber Technologies or generate 10.95% 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.  Uber Technologies

Antero Midstream Partners

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 9 (%) 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.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Antero Midstream and Uber Technologies

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

The idea behind Antero Midstream Partners and Uber Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.