Correlation Between Athene Holding and Bank of America
Can any of the company-specific risk be diversified away by investing in both Athene Holding and Bank of America 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 Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athene Holding and Bank of America, you can compare the effects of market volatilities on Athene Holding and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and Bank of America.
Diversification Opportunities for Athene Holding and Bank of America
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Athene and Bank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of America has no effect on the direction of Athene Holding i.e., Athene Holding and Bank of America go up and down completely randomly.
Pair Corralation between Athene Holding and Bank of America
Assuming the 90 days trading horizon Athene Holding is expected to generate 1.55 times more return on investment than Bank of America. However, Athene Holding is 1.55 times more volatile than Bank of America. It trades about 0.07 of its potential returns per unit of risk. Bank of America is currently generating about -0.09 per unit of risk. If you would invest 1,932 in Athene Holding on August 31, 2024 and sell it today you would earn a total of 42.00 from holding Athene Holding or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athene Holding vs. Bank of America
Performance |
| Timeline |
| Athene Holding |
| Bank of America |
Athene Holding and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athene Holding and Bank of America
The main advantage of trading using opposite Athene Holding and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Athene Holding vs. Athene Holding | Athene Holding vs. The Hartford Financial | Athene Holding vs. Arch Capital Group | Athene Holding vs. Athene Holding |
| Bank of America vs. JPMorgan Chase Co | Bank of America vs. JPMorgan Chase Co | Bank of America vs. Wells Fargo | Bank of America vs. Wells Fargo |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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