Correlation Between ATHENE HOLDING and SCOR SE

Can any of the company-specific risk be diversified away by investing in both ATHENE HOLDING and SCOR SE 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 SCOR SE 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 SCOR SE, you can compare the effects of market volatilities on ATHENE HOLDING and SCOR SE 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 SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATHENE HOLDING and SCOR SE.

Diversification Opportunities for ATHENE HOLDING and SCOR SE

0.86

Correlation Coefficient

ATHENE HOLDING  SCOR SE

Very poor diversification

The 3 months correlation between ATHENE and SCOR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ATHENE HOLDING PRFSERC and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE 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 SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of ATHENE HOLDING i.e., ATHENE HOLDING and SCOR SE go up and down completely randomly.

Pair Corralation between ATHENE HOLDING and SCOR SE

Assuming the 90 days trading horizon ATHENE HOLDING is expected to generate 1.04 times less return on investment than SCOR SE. But when comparing it to its historical volatility, ATHENE HOLDING PRFSERC is 1.76 times less risky than SCOR SE. It trades about 0.2 of its potential returns per unit of risk. SCOR SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,402  in SCOR SE on October 12, 2024 and sell it today you would earn a total of  62.00  from holding SCOR SE or generate 2.58% return on investment over 90 days.

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

ATHENE HOLDING PRFSERC  vs.  SCOR SE

ATHENE HOLDING PRFSERC

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATHENE HOLDING PRFSERC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ATHENE HOLDING may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SCOR SE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SCOR SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATHENE HOLDING and SCOR SE

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

The idea behind ATHENE HOLDING PRFSERC and SCOR SE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.