Correlation Between Dow Jones and Athene Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Athene Holding 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 Dow Jones and Athene Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Athene Holding, you can compare the effects of market volatilities on Dow Jones and Athene Holding 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 Dow Jones with a short position of Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Athene Holding.
Diversification Opportunities for Dow Jones and Athene Holding
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Athene is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of Dow Jones i.e., Dow Jones and Athene Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Athene Holding
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.74 times more return on investment than Athene Holding. However, Dow Jones Industrial is 1.35 times less risky than Athene Holding. It trades about 0.15 of its potential returns per unit of risk. Athene Holding is currently generating about -0.11 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Athene Holding
Performance |
| Timeline |
Dow Jones and Athene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Athene Holding
Pair trading matchups for Athene Holding
Pair Trading with Dow Jones and Athene Holding
The main advantage of trading using opposite Dow Jones and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Athene Holding 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 Athene Holding will offset losses from the drop in Athene Holding's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Athene Holding vs. Enstar Group Limited | Athene Holding vs. Equitable Holdings | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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