Correlation Between Antero Midstream and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Antero Midstream and Consol Energy 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 Consol Energy 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 Consol Energy, you can compare the effects of market volatilities on Antero Midstream and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Midstream and Consol Energy.
Diversification Opportunities for Antero Midstream and Consol Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Antero and Consol is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Antero Midstream Partners and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Antero Midstream i.e., Antero Midstream and Consol Energy go up and down completely randomly.
Pair Corralation between Antero Midstream and Consol Energy
Allowing for the 90-day total investment horizon Antero Midstream is expected to generate 2.21 times less return on investment than Consol Energy. But when comparing it to its historical volatility, Antero Midstream Partners is 1.5 times less risky than Consol Energy. It trades about 0.07 of its potential returns per unit of risk. Consol Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,433 in Consol Energy on July 29, 2024 and sell it today you would earn a total of 345.00 from holding Consol Energy or generate 3.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Antero Midstream Partners vs. Consol Energy
Performance |
Timeline |
Antero Midstream Partners |
Consol Energy |
Antero Midstream and Consol Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Antero Midstream and Consol Energy
The main advantage of trading using opposite Antero Midstream and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Midstream position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy's long position.Antero Midstream vs. EnLink Midstream LLC | Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. Plains GP Holdings | Antero Midstream vs. Plains All American |
Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Stocks Directory Find actively traded stocks across global markets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |