Correlation Between Adobe Systems and Aurora Mobile
Can any of the company-specific risk be diversified away by investing in both Adobe Systems 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 Adobe Systems and Aurora Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adobe Systems Incorporated and Aurora Mobile, you can compare the effects of market volatilities on Adobe Systems 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 Adobe Systems with a short position of Aurora Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adobe Systems and Aurora Mobile.
Diversification Opportunities for Adobe Systems and Aurora Mobile
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adobe and Aurora is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Adobe Systems Incorporated and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and Adobe Systems 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 Adobe Systems Incorporated 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 Adobe Systems i.e., Adobe Systems and Aurora Mobile go up and down completely randomly.
Pair Corralation between Adobe Systems and Aurora Mobile
Given the investment horizon of 90 days Adobe Systems Incorporated is expected to generate 0.49 times more return on investment than Aurora Mobile. However, Adobe Systems Incorporated is 2.05 times less risky than Aurora Mobile. It trades about 0.02 of its potential returns per unit of risk. Aurora Mobile is currently generating about -0.05 per unit of risk. If you would invest 44,534 in Adobe Systems Incorporated on December 29, 2023 and sell it today you would earn a total of 5,926 from holding Adobe Systems Incorporated or generate 13.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Adobe Systems Incorporated vs. Aurora Mobile
Performance |
Timeline |
Adobe Systems rporated |
Aurora Mobile |
Adobe Systems and Aurora Mobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adobe Systems and Aurora Mobile
The main advantage of trading using opposite Adobe Systems and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adobe Systems 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.Adobe Systems vs. SentinelOne | Adobe Systems vs. BlackBerry | Adobe Systems vs. Global Blue Group | Adobe Systems vs. Aurora Mobile |
Aurora Mobile vs. SentinelOne | Aurora Mobile vs. BlackBerry | Aurora Mobile vs. Global Blue Group | Aurora Mobile vs. Marqeta |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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