Correlation Between American International and Athene Holding

Can any of the company-specific risk be diversified away by investing in both American International 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 American International and Athene Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American International Group and Athene Holding, you can compare the effects of market volatilities on American International 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 American International with a short position of Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Athene Holding.

Diversification Opportunities for American International and Athene Holding

0.22

Correlation Coefficient

American International  Athene Holding

Modest diversification

The 3 months correlation between American and Athene is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and American International 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 American International Group 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 American International i.e., American International and Athene Holding go up and down completely randomly.

Pair Corralation between American International and Athene Holding

Considering the 90-day investment horizon American International Group is expected to generate 0.98 times more return on investment than Athene Holding. However, American International Group is 1.02 times less risky than Athene Holding. It trades about -0.17 of its potential returns per unit of risk. Athene Holding is currently generating about -0.3 per unit of risk. If you would invest  7,764  in American International Group on January 29, 2024 and sell it today you would lose (311.00) from holding American International Group or give up 4.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

American International Group  vs.  Athene Holding

American International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American International Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, American International may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Athene Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athene Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Athene Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American International and Athene Holding

The main advantage of trading using opposite American International and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International 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.

The idea behind American International Group and Athene Holding 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.