Correlation Between Equitable Holdings and Athene Holding

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

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

Diversification Opportunities for Equitable Holdings and Athene Holding

-0.25

Correlation Coefficient

Equitable Holdings  Athene Holding

Very good diversification

The 3 months correlation between Equitable and Athene is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings i.e., Equitable Holdings and Athene Holding go up and down completely randomly.

Pair Corralation between Equitable Holdings and Athene Holding

Assuming the 90 days trading horizon Equitable Holdings is expected to generate 1.23 times more return on investment than Athene Holding. However, Equitable Holdings is 1.23 times more volatile than Athene Holding. It trades about 0.05 of its potential returns per unit of risk. Athene Holding is currently generating about 0.03 per unit of risk. If you would invest  1,768  in Equitable Holdings on September 2, 2024 and sell it today you would earn a total of  527.00  from holding Equitable Holdings or generate 29.81% return on investment over 90 days.

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

Equitable Holdings  vs.  Athene Holding

Equitable Holdings

Risk-Adjusted Performance

1 of 100

Weak

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

Athene Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Equitable Holdings and Athene Holding

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

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.