Correlation Between Athene Holding and Allstate

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

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

Diversification Opportunities for Athene Holding and Allstate

0.66

Correlation Coefficient

Athene Holding  Allstate

Poor diversification

The 3 months correlation between Athene and Allstate is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate 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 Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of Athene Holding i.e., Athene Holding and Allstate go up and down completely randomly.

Pair Corralation between Athene Holding and Allstate

Assuming the 90 days trading horizon Athene Holding is expected to under-perform the Allstate. In addition to that, Athene Holding is 1.58 times more volatile than The Allstate. It trades about -0.16 of its total potential returns per unit of risk. The Allstate is currently generating about -0.12 per unit of volatility. If you would invest  2,091  in The Allstate on September 22, 2024 and sell it today you would lose (41.00) from holding The Allstate or give up 1.96% of portfolio value over 90 days.

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

Athene Holding  vs.  The Allstate

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. In spite of rather sound technical indicators, Athene Holding is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Allstate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Allstate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Preferred Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Athene Holding and Allstate

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

The idea behind Athene Holding and The Allstate 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.