Correlation Between ATHENE HOLDING and General Mills

Can any of the company-specific risk be diversified away by investing in both ATHENE HOLDING and General Mills 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 General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATHENE HOLDING PRFSERC and General Mills, you can compare the effects of market volatilities on ATHENE HOLDING and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATHENE HOLDING and General Mills.

Diversification Opportunities for ATHENE HOLDING and General Mills

0.9

Correlation Coefficient

ATHENE HOLDING  General Mills

Almost no diversification

The 3 months correlation between ATHENE and General is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ATHENE HOLDING PRFSERC and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 PRFSERC are associated (or correlated) with General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of ATHENE HOLDING i.e., ATHENE HOLDING and General Mills go up and down completely randomly.

Pair Corralation between ATHENE HOLDING and General Mills

Assuming the 90 days trading horizon ATHENE HOLDING is expected to generate 4.62 times less return on investment than General Mills. But when comparing it to its historical volatility, ATHENE HOLDING PRFSERC is 1.86 times less risky than General Mills. It trades about 0.05 of its potential returns per unit of risk. General Mills is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,548  in General Mills on September 23, 2024 and sell it today you would earn a total of  346.00  from holding General Mills or generate 4.05% 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 PRFSERC  vs.  General Mills

ATHENE HOLDING PRFSERC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATHENE HOLDING PRFSERC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ATHENE HOLDING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

General Mills

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, General Mills unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATHENE HOLDING and General Mills

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

The idea behind ATHENE HOLDING PRFSERC and General Mills 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.