Correlation Between ATHENE and Yuexiu Transport

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

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

Diversification Opportunities for ATHENE and Yuexiu Transport

-0.12

Correlation Coefficient

ATHENE  Yuexiu Transport

Good diversification

The 3 months correlation between ATHENE and Yuexiu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ATHENE HLDG LTD and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and ATHENE 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 HLDG LTD are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of ATHENE i.e., ATHENE and Yuexiu Transport go up and down completely randomly.

Pair Corralation between ATHENE and Yuexiu Transport

Assuming the 90 days trading horizon ATHENE HLDG LTD is expected to under-perform the Yuexiu Transport. But the bond apears to be less risky and, when comparing its historical volatility, ATHENE HLDG LTD is 3.79 times less risky than Yuexiu Transport. The bond trades about 0.0 of its potential returns per unit of risk. The Yuexiu Transport Infrastructure is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Yuexiu Transport Infrastructure on October 15, 2024 and sell it today you would earn a total of  40.00  from holding Yuexiu Transport Infrastructure or generate 222.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

ATHENE HLDG LTD  vs.  Yuexiu Transport Infrastructur

ATHENE HLDG LTD

Risk-Adjusted Performance

0 of 100

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.

Yuexiu Transport Inf

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with ATHENE and Yuexiu Transport

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

The idea behind ATHENE HLDG LTD and Yuexiu Transport Infrastructure 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.