Correlation Between ATHENE and Reservoir Media

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

By analyzing existing cross correlation between ATHENE HLDG LTD and Reservoir Media, you can compare the effects of market volatilities on ATHENE and Reservoir Media 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 with a short position of Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATHENE and Reservoir Media.

Diversification Opportunities for ATHENE and Reservoir Media

-0.84

Correlation Coefficient

ATHENE  Reservoir Media

Pay attention - limited upside

The 3 months correlation between ATHENE and Reservoir is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ATHENE HLDG LTD and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media and ATHENE 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 HLDG LTD are associated (or correlated) with Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of ATHENE i.e., ATHENE and Reservoir Media go up and down completely randomly.

Pair Corralation between ATHENE and Reservoir Media

Assuming the 90 days trading horizon ATHENE HLDG LTD is expected to under-perform the Reservoir Media. But the bond apears to be less risky and, when comparing its historical volatility, ATHENE HLDG LTD is 2.88 times less risky than Reservoir Media. The bond trades about -0.05 of its potential returns per unit of risk. The Reservoir Media is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  736.00  in Reservoir Media on September 2, 2024 and sell it today you would earn a total of  208.00  from holding Reservoir Media or generate 28.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

ATHENE HLDG LTD  vs.  Reservoir Media

ATHENE HLDG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Reservoir Media

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reservoir Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATHENE and Reservoir Media

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

The idea behind ATHENE HLDG LTD and Reservoir Media 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.