Correlation Between WPP PLC and ATHENE
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By analyzing existing cross correlation between WPP PLC ADR and ATHENE HLDG LTD, you can compare the effects of market volatilities on WPP PLC and ATHENE 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 WPP PLC with a short position of ATHENE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPP PLC and ATHENE.
Diversification Opportunities for WPP PLC and ATHENE
Pay attention - limited upside
The 3 months correlation between WPP and ATHENE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding WPP PLC ADR and ATHENE HLDG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATHENE HLDG LTD and WPP PLC 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 WPP PLC ADR are associated (or correlated) with ATHENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATHENE HLDG LTD has no effect on the direction of WPP PLC i.e., WPP PLC and ATHENE go up and down completely randomly.
Pair Corralation between WPP PLC and ATHENE
Considering the 90-day investment horizon WPP PLC ADR is expected to generate 1.6 times more return on investment than ATHENE. However, WPP PLC is 1.6 times more volatile than ATHENE HLDG LTD. It trades about 0.19 of its potential returns per unit of risk. ATHENE HLDG LTD is currently generating about -0.04 per unit of risk. If you would invest 4,561 in WPP PLC ADR on September 3, 2024 and sell it today you would earn a total of 906.00 from holding WPP PLC ADR or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
WPP PLC ADR vs. ATHENE HLDG LTD
Performance |
| Timeline |
| WPP PLC ADR |
| ATHENE HLDG LTD |
WPP PLC and ATHENE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPP PLC and ATHENE
The main advantage of trading using opposite WPP PLC and ATHENE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPP PLC position performs unexpectedly, ATHENE 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 will offset losses from the drop in ATHENE's long position.The idea behind WPP PLC ADR and ATHENE HLDG LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ATHENE vs. WPP PLC ADR | ATHENE vs. Marchex | ATHENE vs. AmTrust Financial Services | ATHENE vs. Dolphin Entertainment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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