Correlation Between NN Group and Athene Holding

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

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

Diversification Opportunities for NN Group and Athene Holding

-0.59

Correlation Coefficient

NN Group  Athene Holding

Excellent diversification

The 3 months correlation between NNGRY and Athene is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and NN Group 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 NN Group NV 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 NN Group i.e., NN Group and Athene Holding go up and down completely randomly.

Pair Corralation between NN Group and Athene Holding

Assuming the 90 days horizon NN Group NV is expected to under-perform the Athene Holding. In addition to that, NN Group is 3.41 times more volatile than Athene Holding. It trades about -0.14 of its total potential returns per unit of risk. Athene Holding is currently generating about 0.07 per unit of volatility. If you would invest  2,499  in Athene Holding on September 12, 2024 and sell it today you would earn a total of  33.00  from holding Athene Holding or generate 1.32% return on investment over 90 days.

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

NN Group NV  vs.  Athene Holding

NN Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NN Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Athene Holding

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 5 (%) 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 NN Group and Athene Holding

The main advantage of trading using opposite NN Group and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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 NN Group NV 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.