Correlation Between FG Merger and Athena Technology
Can any of the company-specific risk be diversified away by investing in both FG Merger and Athena Technology 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 FG Merger and Athena Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Merger Corp and Athena Technology Acquisition, you can compare the effects of market volatilities on FG Merger and Athena Technology 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 FG Merger with a short position of Athena Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Merger and Athena Technology.
Diversification Opportunities for FG Merger and Athena Technology
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FGMCW and Athena is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FG Merger Corp and Athena Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athena Technology and FG Merger 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 FG Merger Corp are associated (or correlated) with Athena Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athena Technology has no effect on the direction of FG Merger i.e., FG Merger and Athena Technology go up and down completely randomly.
Pair Corralation between FG Merger and Athena Technology
Assuming the 90 days horizon FG Merger Corp is expected to generate 60.87 times more return on investment than Athena Technology. However, FG Merger is 60.87 times more volatile than Athena Technology Acquisition. It trades about 0.19 of its potential returns per unit of risk. Athena Technology Acquisition is currently generating about 0.04 per unit of risk. If you would invest 5.00 in FG Merger Corp on September 3, 2024 and sell it today you would earn a total of 5.00 from holding FG Merger Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 16.36% |
| Values | Daily Returns |
FG Merger Corp vs. Athena Technology Acquisition
Performance |
| Timeline |
| FG Merger Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Athena Technology |
FG Merger and Athena Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Merger and Athena Technology
The main advantage of trading using opposite FG Merger and Athena Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Merger position performs unexpectedly, Athena Technology 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 Athena Technology will offset losses from the drop in Athena Technology's long position.The idea behind FG Merger Corp and Athena Technology Acquisition 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.| Athena Technology vs. Alpha Star Acquisition | Athena Technology vs. Alpha One | Athena Technology vs. A SPAC II |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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