Correlation Between Antero Resources and China Yuchai
Can any of the company-specific risk be diversified away by investing in both Antero Resources and China Yuchai 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 China Yuchai 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 China Yuchai International, you can compare the effects of market volatilities on Antero Resources and China Yuchai 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 China Yuchai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and China Yuchai.
Diversification Opportunities for Antero Resources and China Yuchai
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antero and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna 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 China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Antero Resources i.e., Antero Resources and China Yuchai go up and down completely randomly.
Pair Corralation between Antero Resources and China Yuchai
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 1.97 times more return on investment than China Yuchai. However, Antero Resources is 1.97 times more volatile than China Yuchai International. It trades about 0.39 of its potential returns per unit of risk. China Yuchai International is currently generating about -0.13 per unit of risk. If you would invest 2,732 in Antero Resources Corp on January 26, 2024 and sell it today you would earn a total of 412.00 from holding Antero Resources Corp or generate 15.08% 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. China Yuchai International
Performance |
Timeline |
Antero Resources Corp |
China Yuchai Interna |
Antero Resources and China Yuchai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Antero Resources and China Yuchai
The main advantage of trading using opposite Antero Resources and China Yuchai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, China Yuchai 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 China Yuchai will offset losses from the drop in China Yuchai's long position.Antero Resources vs. Southwestern Energy | Antero Resources vs. Chesapeake Energy Corp | Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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