Correlation Between Antero Midstream and MCDONALDS

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

Diversification Opportunities for Antero Midstream and MCDONALDS

-0.5

Correlation Coefficient

Antero Midstream  MCDONALDS

Very good diversification

The 3 months correlation between Antero and MCDONALDS is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and MCDONALDS PORATION MTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCDONALDS PORATION MTN 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 MCDONALDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCDONALDS PORATION MTN has no effect on the direction of Antero Midstream i.e., Antero Midstream and MCDONALDS go up and down completely randomly.

Pair Corralation between Antero Midstream and MCDONALDS

Allowing for the 90-day total investment horizon Antero Midstream Partners is expected to generate 1.62 times more return on investment than MCDONALDS. However, Antero Midstream is 1.62 times more volatile than MCDONALDS PORATION MTN. It trades about 0.13 of its potential returns per unit of risk. MCDONALDS PORATION MTN is currently generating about -0.03 per unit of risk. If you would invest  1,434  in Antero Midstream Partners on September 2, 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	Very Weak
Accuracy	93.75%
Values	Daily Returns

Antero Midstream Partners  vs.  MCDONALDS PORATION MTN

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 unsteady primary indicators, Antero Midstream may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MCDONALDS PORATION MTN

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Antero Midstream and MCDONALDS

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

The idea behind Antero Midstream Partners and MCDONALDS PORATION MTN 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.