Correlation Between Athene Holding and State Street

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

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

Diversification Opportunities for Athene Holding and State Street

0.44

Correlation Coefficient

Athene Holding  State Street

Very weak diversification

The 3 months correlation between Athene and State is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Athene Holding and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Athene Holding i.e., Athene Holding and State Street go up and down completely randomly.

Pair Corralation between Athene Holding and State Street

Assuming the 90 days trading horizon Athene Holding is expected to generate 1.39 times more return on investment than State Street. However, Athene Holding is 1.39 times more volatile than State Street. It trades about 0.09 of its potential returns per unit of risk. State Street is currently generating about 0.07 per unit of risk. If you would invest  2,448  in Athene Holding on September 3, 2024 and sell it today you would earn a total of  88.00  from holding Athene Holding or generate 3.59% return on investment over 90 days.

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

Athene Holding  vs.  State Street

Athene Holding

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Athene Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

State Street

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in State Street are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Athene Holding and State Street

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

The idea behind Athene Holding and State Street 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.