Correlation Between Athene Holding and Axa Equitable
Can any of the company-specific risk be diversified away by investing in both Athene Holding and Axa Equitable 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 Axa Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athene Holding and Axa Equitable Holdings, you can compare the effects of market volatilities on Athene Holding and Axa Equitable 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 Axa Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and Axa Equitable.
Diversification Opportunities for Athene Holding and Axa Equitable
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Athene and Axa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and Axa Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axa Equitable Holdings 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 Axa Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axa Equitable Holdings has no effect on the direction of Athene Holding i.e., Athene Holding and Axa Equitable go up and down completely randomly.
Pair Corralation between Athene Holding and Axa Equitable
Assuming the 90 days trading horizon Athene Holding is expected to generate 2.37 times less return on investment than Axa Equitable. But when comparing it to its historical volatility, Athene Holding is 13.4 times less risky than Axa Equitable. It trades about 0.18 of its potential returns per unit of risk. Axa Equitable Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,563 in Axa Equitable Holdings on September 19, 2024 and sell it today you would earn a total of 94.00 from holding Axa Equitable Holdings or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athene Holding vs. Axa Equitable Holdings
Performance |
| Timeline |
| Athene Holding |
| Axa Equitable Holdings |
Athene Holding and Axa Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athene Holding and Axa Equitable
The main advantage of trading using opposite Athene Holding and Axa Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, Axa Equitable 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 Axa Equitable will offset losses from the drop in Axa Equitable's long position.| Athene Holding vs. Enstar Group Limited | Athene Holding vs. Berkshire Hathaway | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding |
| Axa Equitable vs. American International Group | Axa Equitable vs. Arch Capital Group | Axa Equitable vs. Sun Life Financial | Axa Equitable vs. Hartford Financial Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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