Correlation Between Athene Holding and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Athene Holding and Brighthouse Financial 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 Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athene Holding and Brighthouse Financial, you can compare the effects of market volatilities on Athene Holding and Brighthouse Financial 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 Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and Brighthouse Financial.
Diversification Opportunities for Athene Holding and Brighthouse Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Athene and Brighthouse is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial 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 Brighthouse Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighthouse Financial has no effect on the direction of Athene Holding i.e., Athene Holding and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Athene Holding and Brighthouse Financial
Assuming the 90 days trading horizon Athene Holding is expected to generate 0.88 times more return on investment than Brighthouse Financial. However, Athene Holding is 1.13 times less risky than Brighthouse Financial. It trades about 0.03 of its potential returns per unit of risk. Brighthouse Financial is currently generating about 0.03 per unit of risk. If you would invest 1,578 in Athene Holding on August 24, 2024 and sell it today you would earn a total of 345.00 from holding Athene Holding or generate 21.86% 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. Brighthouse Financial
Performance |
| Timeline |
| Athene Holding |
| Brighthouse Financial |
Athene Holding and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athene Holding and Brighthouse Financial
The main advantage of trading using opposite Athene Holding and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, Brighthouse Financial 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 Brighthouse Financial will offset losses from the drop in Brighthouse Financial's long position.| Athene Holding vs. Enstar Group Limited | Athene Holding vs. Berkshire Hathaway | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding |
| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Morgan Stanley |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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