Correlation Between DocuSign and Aurora Mobile

Can any of the company-specific risk be diversified away by investing in both DocuSign 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 DocuSign and Aurora Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DocuSign and Aurora Mobile, you can compare the effects of market volatilities on DocuSign 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 DocuSign with a short position of Aurora Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of DocuSign and Aurora Mobile.

Diversification Opportunities for DocuSign and Aurora Mobile

0.43

Correlation Coefficient

DocuSign  Aurora Mobile

Very weak diversification

The 3 months correlation between DocuSign and Aurora is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DocuSign and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and DocuSign 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 DocuSign 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 DocuSign i.e., DocuSign and Aurora Mobile go up and down completely randomly.

Pair Corralation between DocuSign and Aurora Mobile

Given the investment horizon of 90 days DocuSign is expected to under-perform the Aurora Mobile. But the stock apears to be less risky and, when comparing its historical volatility, DocuSign is 3.04 times less risky than Aurora Mobile. The stock trades about -0.05 of its potential returns per unit of risk. The Aurora Mobile is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  333.00  in Aurora Mobile on January 20, 2024 and sell it today you would lose (41.00) from holding Aurora Mobile or give up 12.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DocuSign  vs.  Aurora Mobile

DocuSign

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DocuSign has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Aurora Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Aurora Mobile is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DocuSign and Aurora Mobile

The main advantage of trading using opposite DocuSign and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DocuSign 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 DocuSign 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.