Correlation Between CDK Global and Aurora Mobile

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy13.77%
ValuesDaily Returns

CDK Global Holdings  vs.  Aurora Mobile

 Performance 
       Timeline  
CDK Global Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CDK Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, CDK Global is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Aurora Mobile 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Aurora Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind CDK Global Holdings and Aurora Mobile 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.
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.

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Money Managers
Screen money managers from public funds and ETFs managed around the world
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories