Correlation Between AXA SA and Athene Holding

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

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

Diversification Opportunities for AXA SA and Athene Holding

0.22

Correlation Coefficient

AXA SA  Athene Holding

Modest diversification

The 3 months correlation between AXA and Athene is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and AXA SA 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 AXA SA are associated (or correlated) with Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of AXA SA i.e., AXA SA and Athene Holding go up and down completely randomly.

Pair Corralation between AXA SA and Athene Holding

Assuming the 90 days horizon AXA SA is expected to generate 1.75 times more return on investment than Athene Holding. However, AXA SA is 1.75 times more volatile than Athene Holding. It trades about 0.08 of its potential returns per unit of risk. Athene Holding is currently generating about 0.05 per unit of risk. If you would invest  3,161  in AXA SA on September 12, 2024 and sell it today you would earn a total of  512.00  from holding AXA SA or generate 16.2% return on investment over 90 days.

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

AXA SA  vs.  Athene Holding

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, AXA SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Athene Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 1 (%) 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.

Pair Trading with AXA SA and Athene Holding

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

The idea behind AXA SA and Athene Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.