Correlation Between Athene Holding and Fundamental Global

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

By analyzing existing cross correlation between Athene Holding and Fundamental Global, you can compare the effects of market volatilities on Athene Holding and Fundamental Global 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 Fundamental Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athene Holding and Fundamental Global.

Diversification Opportunities for Athene Holding and Fundamental Global

0.11

Correlation Coefficient

Athene Holding  Fundamental Global

Average diversification

The 3 months correlation between Athene and Fundamental is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global 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 Fundamental Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Global has no effect on the direction of Athene Holding i.e., Athene Holding and Fundamental Global go up and down completely randomly.

Pair Corralation between Athene Holding and Fundamental Global

Assuming the 90 days trading horizon Athene Holding is expected to generate 20.98 times less return on investment than Fundamental Global. But when comparing it to its historical volatility, Athene Holding is 4.39 times less risky than Fundamental Global. It trades about 0.01 of its potential returns per unit of risk. Fundamental Global is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,525  in Fundamental Global on September 12, 2024 and sell it today you would earn a total of  165.00  from holding Fundamental Global or generate 10.82% return on investment over 90 days.

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

Athene Holding  vs.  Fundamental Global

Athene Holding

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Athene Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fundamental Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fundamental Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Athene Holding and Fundamental Global

The main advantage of trading using opposite Athene Holding and Fundamental Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athene Holding position performs unexpectedly, Fundamental Global 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 Fundamental Global will offset losses from the drop in Fundamental Global's long position.

The idea behind Athene Holding and Fundamental Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.