Correlation Between RH and ATHENE

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

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

Diversification Opportunities for RH and ATHENE

-0.3

Correlation Coefficient

RH  ATHENE

Very good diversification

The 3 months correlation between RH and ATHENE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding RH and ATHENE HLDG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATHENE HLDG LTD and RH 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 RH are associated (or correlated) with ATHENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATHENE HLDG LTD has no effect on the direction of RH i.e., RH and ATHENE go up and down completely randomly.

Pair Corralation between RH and ATHENE

Allowing for the 90-day total investment horizon RH is expected to under-perform the ATHENE. In addition to that, RH is 3.82 times more volatile than ATHENE HLDG LTD. It trades about -0.24 of its total potential returns per unit of risk. ATHENE HLDG LTD is currently generating about -0.1 per unit of volatility. If you would invest  10,420  in ATHENE HLDG LTD on December 20, 2024 and sell it today you would lose (561.00) from holding ATHENE HLDG LTD or give up 5.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

RH  vs.  ATHENE HLDG LTD

RH

Risk-Adjusted Performance

Very Weak

Over the last 90 days RH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ATHENE HLDG LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATHENE HLDG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ATHENE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RH and ATHENE

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

The idea behind RH and ATHENE HLDG LTD 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.