Correlation Between Aurora Mobile and Salesforce
Can any of the company-specific risk be diversified away by investing in both Aurora Mobile and Salesforce 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 Aurora Mobile and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Mobile and Salesforce, you can compare the effects of market volatilities on Aurora Mobile and Salesforce 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 Aurora Mobile with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Mobile and Salesforce.
Diversification Opportunities for Aurora Mobile and Salesforce
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurora and Salesforce is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Aurora Mobile 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 Aurora Mobile are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Salesforce go up and down completely randomly.
Pair Corralation between Aurora Mobile and Salesforce
Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the Salesforce. In addition to that, Aurora Mobile is 3.69 times more volatile than Salesforce. It trades about -0.01 of its total potential returns per unit of risk. Salesforce is currently generating about 0.07 per unit of volatility. If you would invest 22,531 in Salesforce on January 24, 2024 and sell it today you would earn a total of 4,850 from holding Salesforce or generate 21.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aurora Mobile vs. Salesforce
Performance |
Timeline |
Aurora Mobile |
Salesforce |
Aurora Mobile and Salesforce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aurora Mobile and Salesforce
The main advantage of trading using opposite Aurora Mobile and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.Aurora Mobile vs. Palo Alto Networks | Aurora Mobile vs. Zscaler | Aurora Mobile vs. Okta Inc | Aurora Mobile vs. MongoDB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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