Correlation Between Athene Holding and Equitable Holdings

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

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

Diversification Opportunities for Athene Holding and Equitable Holdings

0.58

Correlation Coefficient

Athene Holding  Equitable Holdings

Very weak diversification

The 3 months correlation between Athene and Equitable is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Athene Holding i.e., Athene Holding and Equitable Holdings go up and down completely randomly.

Pair Corralation between Athene Holding and Equitable Holdings

Assuming the 90 days trading horizon Athene Holding is expected to under-perform the Equitable Holdings. In addition to that, Athene Holding is 1.24 times more volatile than Equitable Holdings. It trades about -0.11 of its total potential returns per unit of risk. Equitable Holdings is currently generating about -0.05 per unit of volatility. If you would invest  1,827  in Equitable Holdings on September 21, 2024 and sell it today you would lose (22.00) from holding Equitable Holdings or give up 1.2% of portfolio value over 90 days.

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

Athene Holding  vs.  Equitable Holdings

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Equitable Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equitable Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Preferred Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Athene Holding and Equitable Holdings

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

The idea behind Athene Holding and Equitable Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.