Correlation Between Antero Resources and Andritz AG
Can any of the company-specific risk be diversified away by investing in both Antero Resources and Andritz AG 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 Resources and Andritz AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antero Resources Corp and Andritz AG, you can compare the effects of market volatilities on Antero Resources and Andritz AG 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 Resources with a short position of Andritz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and Andritz AG.
Diversification Opportunities for Antero Resources and Andritz AG
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Antero and Andritz is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and Antero Resources 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 Resources Corp are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of Antero Resources i.e., Antero Resources and Andritz AG go up and down completely randomly.
Pair Corralation between Antero Resources and Andritz AG
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 0.87 times more return on investment than Andritz AG. However, Antero Resources Corp is 1.15 times less risky than Andritz AG. It trades about 0.11 of its potential returns per unit of risk. Andritz AG is currently generating about -0.15 per unit of risk. If you would invest 2,937 in Antero Resources Corp on October 8, 2024 and sell it today you would earn a total of 557.00 from holding Antero Resources Corp or generate 18.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Antero Resources Corp vs. Andritz AG
Performance |
Timeline |
Antero Resources Corp |
Andritz AG |
Antero Resources and Andritz AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Antero Resources and Andritz AG
The main advantage of trading using opposite Antero Resources and Andritz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, Andritz AG 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 Andritz AG will offset losses from the drop in Andritz AG's long position.Antero Resources vs. EQT Corporation | ||
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Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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