Correlation Between Six Flags and Aeon

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

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

Diversification Opportunities for Six Flags and Aeon

0.59

Correlation Coefficient

Six Flags  Aeon

Very weak diversification

The 3 months correlation between Six and Aeon is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon and Six Flags 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 Six Flags Entertainment 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 Six Flags i.e., Six Flags and Aeon go up and down completely randomly.

Pair Corralation between Six Flags and Aeon

Considering the 90-day investment horizon Six Flags is expected to generate 161.9 times less return on investment than Aeon. But when comparing it to its historical volatility, Six Flags Entertainment is 47.31 times less risky than Aeon. It trades about 0.03 of its potential returns per unit of risk. 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 5, 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 Together
Strength	Weak
Accuracy	24.79%
Values	Daily Returns

Six Flags Entertainment  vs.  Aeon Co

Six Flags Entertainment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Entertainment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Six Flags displayed solid returns over the last few months and may actually be approaching a breakup point.

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Six Flags and Aeon

The main advantage of trading using opposite Six Flags and Aeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags 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 Six Flags Entertainment 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.