Correlation Between Antero Midstream and AETNA

Can any of the company-specific risk be diversified away by investing in both Antero Midstream and AETNA 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 AETNA 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 AETNA INC 7625, you can compare the effects of market volatilities on Antero Midstream and AETNA 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 AETNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and AETNA.

Diversification Opportunities for Antero Midstream and AETNA

-0.21

Correlation Coefficient

Antero Midstream  AETNA

Very good diversification

The 3 months correlation between Antero and AETNA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and AETNA INC 7625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AETNA INC 7625 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 AETNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AETNA INC 7625 has no effect on the direction of Antero Midstream i.e., Antero Midstream and AETNA go up and down completely randomly.

Pair Corralation between Antero Midstream and AETNA

Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.33 times more return on investment than AETNA. However, Antero Midstream is 1.33 times more volatile than AETNA INC 7625. It trades about 0.18 of its potential returns per unit of risk. AETNA INC 7625 is currently generating about 0.02 per unit of risk. If you would invest  1,485  in Antero Midstream Partners on December 22, 2024 and sell it today you would earn a total of  295.00  from holding Antero Midstream Partners or generate 19.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.67%
Values	Daily Returns

Antero Midstream Partners  vs.  AETNA INC 7625

Antero Midstream Partners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Antero Midstream displayed solid returns over the last few months and may actually be approaching a breakup point.

AETNA INC 7625

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AETNA INC 7625 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AETNA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Antero Midstream and AETNA

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

The idea behind Antero Midstream Partners and AETNA INC 7625 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.