Correlation Between Athene Holding and AXA SA

Can any of the company-specific risk be diversified away by investing in both Athene Holding and AXA SA 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 AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Athene Holding and AXA SA, you can compare the effects of market volatilities on Athene Holding and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and AXA SA.

Diversification Opportunities for Athene Holding and AXA SA

0.91

Correlation Coefficient

Athene Holding  AXA SA

Almost no diversification

The 3 months correlation between Athene and AXA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Athene Holding i.e., Athene Holding and AXA SA go up and down completely randomly.

Pair Corralation between Athene Holding and AXA SA

Assuming the 90 days trading horizon Athene Holding is expected to generate 28.47 times less return on investment than AXA SA. But when comparing it to its historical volatility, Athene Holding is 9.92 times less risky than AXA SA. It trades about 0.08 of its potential returns per unit of risk. AXA SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,508  in AXA SA on December 29, 2024 and sell it today you would earn a total of  874.00  from holding AXA SA or generate 24.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Athene Holding  vs.  AXA SA

Athene Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Athene Holding is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AXA SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, AXA SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Athene Holding and AXA SA

The main advantage of trading using opposite Athene Holding and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.

The idea behind Athene Holding and AXA SA 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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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.