Correlation Between Athene Holding and FAT Brands
Can any of the company-specific risk be diversified away by investing in both Athene Holding and FAT Brands 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 FAT Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athene Holding and FAT Brands, you can compare the effects of market volatilities on Athene Holding and FAT Brands 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 FAT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and FAT Brands.
Diversification Opportunities for Athene Holding and FAT Brands
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Athene and FAT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and FAT Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAT Brands 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 are associated (or correlated) with FAT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAT Brands has no effect on the direction of Athene Holding i.e., Athene Holding and FAT Brands go up and down completely randomly.
Pair Corralation between Athene Holding and FAT Brands
Assuming the 90 days trading horizon Athene Holding is expected to generate 0.57 times more return on investment than FAT Brands. However, Athene Holding is 1.74 times less risky than FAT Brands. It trades about 0.06 of its potential returns per unit of risk. FAT Brands is currently generating about -0.06 per unit of risk. If you would invest 2,209 in Athene Holding on September 4, 2024 and sell it today you would earn a total of 327.00 from holding Athene Holding or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athene Holding vs. FAT Brands
Performance |
| Timeline |
| Athene Holding |
| FAT Brands |
Athene Holding and FAT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athene Holding and FAT Brands
The main advantage of trading using opposite Athene Holding and FAT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, FAT Brands 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 FAT Brands will offset losses from the drop in FAT Brands' long position.| Athene Holding vs. FAT Brands | Athene Holding vs. Fortress Biotech Pref | Athene Holding vs. Fulton Financial | Athene Holding vs. Aquagold International |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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