Correlation Between INTNED and Antero Midstream

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

By analyzing existing cross correlation between INTNED 547761 01 APR 27 and Antero Midstream Partners, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Antero Midstream.

Diversification Opportunities for INTNED and Antero Midstream

0.43

Correlation Coefficient

INTNED  Antero Midstream

Very weak diversification

The 3 months correlation between INTNED and Antero is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 547761 01 APR 27 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 INTNED 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 INTNED 547761 01 APR 27 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 INTNED i.e., INTNED and Antero Midstream go up and down completely randomly.

Pair Corralation between INTNED and Antero Midstream

Assuming the 90 days trading horizon INTNED is expected to generate 5.71 times less return on investment than Antero Midstream. But when comparing it to its historical volatility, INTNED 547761 01 APR 27 is 2.26 times less risky than Antero Midstream. It trades about 0.03 of its potential returns per unit of risk. Antero Midstream Partners is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  914.00  in Antero Midstream Partners on September 21, 2024 and sell it today you would earn a total of  539.00  from holding Antero Midstream Partners or generate 58.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	32.32%
Values	Daily Returns

INTNED 547761 01 APR 27  vs.  Antero Midstream Partners

INTNED 547761 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 547761 01 APR 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Antero Midstream Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antero Midstream Partners has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with INTNED and Antero Midstream

The main advantage of trading using opposite INTNED and Antero Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 547761 01 APR 27 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.