Correlation Between Occidental Petroleum and Antero Resources
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum 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 Occidental Petroleum and Antero Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Antero Resources Corp, you can compare the effects of market volatilities on Occidental Petroleum 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 Occidental Petroleum with a short position of Antero Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Antero Resources.
Diversification Opportunities for Occidental Petroleum and Antero Resources
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Occidental and Antero is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum i.e., Occidental Petroleum and Antero Resources go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Antero Resources
Considering the 90-day investment horizon Occidental Petroleum is expected to generate 2.0 times less return on investment than Antero Resources. But when comparing it to its historical volatility, Occidental Petroleum is 1.98 times less risky than Antero Resources. It trades about 0.25 of its potential returns per unit of risk. Antero Resources Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,341 in Antero Resources Corp on January 20, 2024 and sell it today you would earn a total of 545.00 from holding Antero Resources Corp or generate 23.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. Antero Resources Corp
Performance |
| Timeline |
| Occidental Petroleum |
| Antero Resources Corp |
Occidental Petroleum and Antero Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Antero Resources
The main advantage of trading using opposite Occidental Petroleum and Antero Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum 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.| Occidental Petroleum vs. Houston American Energy | Occidental Petroleum vs. Barnwell Industries | Occidental Petroleum vs. Mexco Energy | Occidental Petroleum vs. PHX Minerals |
| Antero Resources vs. Southwestern Energy | Antero Resources vs. Chesapeake Energy Corp | Antero Resources vs. EQT Corporation | Antero Resources vs. Matador Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |