Correlation Between Bowen Acquisition and Aeon

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

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

Diversification Opportunities for Bowen Acquisition and Aeon

-0.75

Correlation Coefficient

Bowen Acquisition  Aeon

Pay attention - limited upside

The 3 months correlation between Bowen and Aeon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bowen Acquisition Corp and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon and Bowen Acquisition 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 Bowen Acquisition Corp are associated (or correlated) with Aeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon has no effect on the direction of Bowen Acquisition i.e., Bowen Acquisition and Aeon go up and down completely randomly.

Pair Corralation between Bowen Acquisition and Aeon

Given the investment horizon of 90 days Bowen Acquisition Corp is expected to under-perform the Aeon. But the stock apears to be less risky and, when comparing its historical volatility, Bowen Acquisition Corp is 40.72 times less risky than Aeon. The stock trades about -0.02 of its potential returns per unit of risk. The Aeon Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Aeon Co on October 23, 2024 and sell it today you would earn a total of  1,912  from holding Aeon Co or generate 1249.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	35.0%
Values	Daily Returns

Bowen Acquisition Corp  vs.  Aeon Co

Bowen Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bowen Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aeon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeon Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aeon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bowen Acquisition and Aeon

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

The idea behind Bowen Acquisition Corp and Aeon Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.