Correlation Between CDK Global and Aurora Mobile
Can any of the company-specific risk be diversified away by investing in both CDK Global and Aurora Mobile 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 CDK Global and Aurora Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDK Global Holdings and Aurora Mobile, you can compare the effects of market volatilities on CDK Global and Aurora Mobile 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 CDK Global with a short position of Aurora Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDK Global and Aurora Mobile.
Diversification Opportunities for CDK Global and Aurora Mobile
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDK and Aurora is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CDK Global Holdings and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and CDK Global 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 CDK Global Holdings are associated (or correlated) with Aurora Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Mobile has no effect on the direction of CDK Global i.e., CDK Global and Aurora Mobile go up and down completely randomly.
Pair Corralation between CDK Global and Aurora Mobile
Considering the 90-day investment horizon CDK Global Holdings is expected to generate 0.05 times more return on investment than Aurora Mobile. However, CDK Global Holdings is 22.07 times less risky than Aurora Mobile. It trades about 0.04 of its potential returns per unit of risk. Aurora Mobile is currently generating about -0.05 per unit of risk. If you would invest 5,445 in CDK Global Holdings on December 29, 2023 and sell it today you would earn a total of 31.00 from holding CDK Global Holdings or generate 0.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 13.77% |
Values | Daily Returns |
CDK Global Holdings vs. Aurora Mobile
Performance |
Timeline |
CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Aurora Mobile |
CDK Global and Aurora Mobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CDK Global and Aurora Mobile
The main advantage of trading using opposite CDK Global and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDK Global position performs unexpectedly, Aurora Mobile 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 Mobile will offset losses from the drop in Aurora Mobile's long position.CDK Global vs. MYnd Analytics | CDK Global vs. Black Box Entertainment | CDK Global vs. Relx PLC ADR | CDK Global vs. Udemy Inc |
Aurora Mobile vs. BlackBerry | Aurora Mobile vs. SentinelOne | Aurora Mobile vs. Block Inc | Aurora Mobile vs. DigitalOcean Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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