Correlation Between Athena Consumer and Aurora Acquisition

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

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

Diversification Opportunities for Athena Consumer and Aurora Acquisition

0.12

Correlation Coefficient

Athena Consumer  Aurora Acquisition

Average diversification

The 3 months correlation between Athena and Aurora is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Athena Consumer Acquisition and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp and Athena Consumer 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 Athena Consumer Acquisition are associated (or correlated) with Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of Athena Consumer i.e., Athena Consumer and Aurora Acquisition go up and down completely randomly.

Pair Corralation between Athena Consumer and Aurora Acquisition

If you would invest  1,038  in Aurora Acquisition Corp on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Aurora Acquisition Corp or generate 0.0% return on investment over 90 days.

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

Athena Consumer Acquisition  vs.  Aurora Acquisition Corp

Athena Consumer Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athena Consumer Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Athena Consumer is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Aurora Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Aurora Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Athena Consumer and Aurora Acquisition

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

The idea behind Athena Consumer Acquisition and Aurora Acquisition Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.