Correlation Between Allstate and Athene Holding
Can any of the company-specific risk be diversified away by investing in both Allstate 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 Allstate and Athene Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Allstate and Athene Holding, you can compare the effects of market volatilities on Allstate 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 Allstate with a short position of Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstate and Athene Holding.
Diversification Opportunities for Allstate and Athene Holding
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allstate and Athene is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Allstate and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding and Allstate 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 The Allstate 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 Allstate i.e., Allstate and Athene Holding go up and down completely randomly.
Pair Corralation between Allstate and Athene Holding
Assuming the 90 days trading horizon The Allstate is expected to under-perform the Athene Holding. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Allstate is 1.4 times less risky than Athene Holding. The preferred stock trades about -0.26 of its potential returns per unit of risk. The Athene Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,965 in Athene Holding on August 28, 2024 and sell it today you would lose (22.00) from holding Athene Holding or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Allstate vs. Athene Holding
Performance |
| Timeline |
| Allstate |
| Athene Holding |
Allstate and Athene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allstate and Athene Holding
The main advantage of trading using opposite Allstate and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allstate 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.| Allstate vs. The Allstate | Allstate vs. MetLife Preferred Stock | Allstate vs. Bank of America | Allstate vs. Capital One Financial |
| Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Aspen Insurance Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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