Correlation Between Quantum and Antero Resources

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

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

Diversification Opportunities for Quantum and Antero Resources

0.66

Correlation Coefficient

Quantum  Antero Resources

Poor diversification

The 3 months correlation between Quantum and Antero is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Antero Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antero Resources Corp and Quantum 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 Quantum are associated (or correlated) with Antero Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antero Resources Corp has no effect on the direction of Quantum i.e., Quantum and Antero Resources go up and down completely randomly.

Pair Corralation between Quantum and Antero Resources

Given the investment horizon of 90 days Quantum is expected to generate 7.25 times more return on investment than Antero Resources. However, Quantum is 7.25 times more volatile than Antero Resources Corp. It trades about 0.09 of its potential returns per unit of risk. Antero Resources Corp is currently generating about 0.07 per unit of risk. If you would invest  732.00  in Quantum on October 11, 2024 and sell it today you would earn a total of  2,411  from holding Quantum or generate 329.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.65%
Values	Daily Returns

Quantum  vs.  Antero Resources Corp

Quantum

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Antero Resources Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Resources Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Antero Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quantum and Antero Resources

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

The idea behind Quantum and Antero Resources Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.