Correlation Between Athene Holding and RenaissanceRe Holdings
Can any of the company-specific risk be diversified away by investing in both Athene Holding and RenaissanceRe Holdings 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 Athene Holding and RenaissanceRe Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athene Holding and RenaissanceRe Holdings, you can compare the effects of market volatilities on Athene Holding and RenaissanceRe Holdings 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 Athene Holding with a short position of RenaissanceRe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and RenaissanceRe Holdings.
Diversification Opportunities for Athene Holding and RenaissanceRe Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Athene and RenaissanceRe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and RenaissanceRe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenaissanceRe Holdings and Athene Holding 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 Athene Holding are associated (or correlated) with RenaissanceRe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenaissanceRe Holdings has no effect on the direction of Athene Holding i.e., Athene Holding and RenaissanceRe Holdings go up and down completely randomly.
Pair Corralation between Athene Holding and RenaissanceRe Holdings
Assuming the 90 days trading horizon Athene Holding is expected to generate 1.6 times more return on investment than RenaissanceRe Holdings. However, Athene Holding is 1.6 times more volatile than RenaissanceRe Holdings. It trades about 0.04 of its potential returns per unit of risk. RenaissanceRe Holdings is currently generating about 0.05 per unit of risk. If you would invest 1,914 in Athene Holding on September 23, 2024 and sell it today you would earn a total of 508.00 from holding Athene Holding or generate 26.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Athene Holding vs. RenaissanceRe Holdings
Performance |
Timeline |
Athene Holding |
RenaissanceRe Holdings |
Athene Holding and RenaissanceRe Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Athene Holding and RenaissanceRe Holdings
The main advantage of trading using opposite Athene Holding and RenaissanceRe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, RenaissanceRe Holdings 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 RenaissanceRe Holdings will offset losses from the drop in RenaissanceRe Holdings' long position.Athene Holding vs. Enstar Group Limited | Athene Holding vs. Equitable Holdings | Athene Holding vs. Athene Holding | Athene Holding vs. Berkshire Hathaway |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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