Correlation Between Antero Resources and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Antero Resources and General Dynamics 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 General Dynamics 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 General Dynamics, you can compare the effects of market volatilities on Antero Resources and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and General Dynamics.
Diversification Opportunities for Antero Resources and General Dynamics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Antero and General is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Antero Resources i.e., Antero Resources and General Dynamics go up and down completely randomly.
Pair Corralation between Antero Resources and General Dynamics
Allowing for the 90-day total investment horizon Antero Resources Corp is expected to generate 1.66 times more return on investment than General Dynamics. However, Antero Resources is 1.66 times more volatile than General Dynamics. It trades about 0.23 of its potential returns per unit of risk. General Dynamics is currently generating about 0.08 per unit of risk. If you would invest 2,669 in Antero Resources Corp on January 20, 2024 and sell it today you would earn a total of 217.00 from holding Antero Resources Corp or generate 8.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Antero Resources Corp vs. General Dynamics
Performance |
Timeline |
Antero Resources Corp |
General Dynamics |
Antero Resources and General Dynamics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Antero Resources and General Dynamics
The main advantage of trading using opposite Antero Resources and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.The idea behind Antero Resources Corp and General Dynamics 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.General Dynamics vs. Novocure | General Dynamics vs. HubSpot | General Dynamics vs. DigitalOcean Holdings | General Dynamics vs. Appian Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |