Correlation Between Getty Realty and Antero Midstream

Can any of the company-specific risk be diversified away by investing in both Getty Realty and Antero Midstream 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 Getty Realty and Antero Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Realty and Antero Midstream Partners, you can compare the effects of market volatilities on Getty Realty and Antero Midstream 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 Getty Realty with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and Antero Midstream.

Diversification Opportunities for Getty Realty and Antero Midstream

0.12

Correlation Coefficient

Getty Realty  Antero Midstream

Average diversification

The 3 months correlation between Getty and Antero is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and Antero Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antero Midstream Partners and Getty Realty 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 Getty Realty are associated (or correlated) with Antero Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antero Midstream Partners has no effect on the direction of Getty Realty i.e., Getty Realty and Antero Midstream go up and down completely randomly.

Pair Corralation between Getty Realty and Antero Midstream

Considering the 90-day investment horizon Getty Realty is expected to generate 26.22 times less return on investment than Antero Midstream. But when comparing it to its historical volatility, Getty Realty is 1.4 times less risky than Antero Midstream. It trades about 0.01 of its potential returns per unit of risk. Antero Midstream Partners is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,402  in Antero Midstream Partners on December 18, 2024 and sell it today you would earn a total of  341.00  from holding Antero Midstream Partners or generate 24.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Getty Realty  vs.  Antero Midstream Partners

Getty Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Antero Midstream Partners

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Midstream Partners are ranked lower than 16 (%) 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.

Pair Trading with Getty Realty and Antero Midstream

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

The idea behind Getty Realty and Antero Midstream Partners 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.