Correlation Between Antero Midstream and MACYS

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

Diversification Opportunities for Antero Midstream and MACYS

0.21

Correlation Coefficient

Antero Midstream  MACYS

Modest diversification

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

Pair Corralation between Antero Midstream and MACYS

Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.14 times more return on investment than MACYS. However, Antero Midstream is 1.14 times more volatile than MACYS RETAIL HLDGS. It trades about 0.04 of its potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about 0.01 per unit of risk. If you would invest  1,434  in Antero Midstream Partners on September 28, 2024 and sell it today you would earn a total of  81.00  from holding Antero Midstream Partners or generate 5.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.29%
Values	Daily Returns

Antero Midstream Partners  vs.  MACYS RETAIL HLDGS

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.

MACYS RETAIL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Antero Midstream and MACYS

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

The idea behind Antero Midstream Partners and MACYS RETAIL HLDGS 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 Anywhere module to track or share privately all of your investments from the convenience of any device.