Correlation Between Lendingtree and Athene Holding

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

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

Diversification Opportunities for Lendingtree and Athene Holding

0.13

Correlation Coefficient

Lendingtree  Athene Holding

Average diversification

The 3 months correlation between Lendingtree and Athene is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lendingtree and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and Lendingtree 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 Lendingtree 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 Lendingtree i.e., Lendingtree and Athene Holding go up and down completely randomly.

Pair Corralation between Lendingtree and Athene Holding

Given the investment horizon of 90 days Lendingtree is expected to generate 3.84 times more return on investment than Athene Holding. However, Lendingtree is 3.84 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 0.04 per unit of risk. If you would invest  2,160  in Lendingtree on September 23, 2024 and sell it today you would earn a total of  1,801  from holding Lendingtree or generate 83.38% return on investment over 90 days.

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

Lendingtree  vs.  Athene Holding

Lendingtree

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendingtree has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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. 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.

Pair Trading with Lendingtree and Athene Holding

The main advantage of trading using opposite Lendingtree and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendingtree 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 Lendingtree 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.