Correlation Between Clearwater Paper and Antero Resources

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Can any of the company-specific risk be diversified away by investing in both Clearwater Paper 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 Clearwater Paper and Antero Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearwater Paper and Antero Resources Corp, you can compare the effects of market volatilities on Clearwater Paper 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 Clearwater Paper with a short position of Antero Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Paper and Antero Resources.

Diversification Opportunities for Clearwater Paper and Antero Resources

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Clearwater and Antero is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper 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 Clearwater Paper 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 Clearwater Paper 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 Clearwater Paper i.e., Clearwater Paper and Antero Resources go up and down completely randomly.

Pair Corralation between Clearwater Paper and Antero Resources

Considering the 90-day investment horizon Clearwater Paper is expected to generate 6.3 times less return on investment than Antero Resources. But when comparing it to its historical volatility, Clearwater Paper is 1.37 times less risky than Antero Resources. It trades about 0.02 of its potential returns per unit of risk. Antero Resources Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  552.00  in Antero Resources Corp on September 10, 2022 and sell it today you would earn a total of  2,653  from holding Antero Resources Corp or generate 480.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Clearwater Paper  vs.  Antero Resources Corp

 Performance (%) 
       Timeline  
Clearwater Paper 
Clearwater Performance
0 of 100
Over the last 90 days Clearwater Paper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Clearwater Paper is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Clearwater Price Channel

Antero Resources Corp 
Antero Performance
0 of 100
Over the last 90 days Antero Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Antero Price Channel

Clearwater Paper and Antero Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Paper and Antero Resources

The main advantage of trading using opposite Clearwater Paper and Antero Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper 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.
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The idea behind Clearwater Paper and Antero Resources Corp 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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