Correlation Between Aurora Mobile and Workiva

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Can any of the company-specific risk be diversified away by investing in both Aurora Mobile and Workiva 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 Workiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Mobile and Workiva, you can compare the effects of market volatilities on Aurora Mobile and Workiva 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 Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Mobile and Workiva.

Diversification Opportunities for Aurora Mobile and Workiva

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Aurora and Workiva is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Workiva go up and down completely randomly.

Pair Corralation between Aurora Mobile and Workiva

Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the Workiva. In addition to that, Aurora Mobile is 1.69 times more volatile than Workiva. It trades about -0.05 of its total potential returns per unit of risk. Workiva is currently generating about 0.0 per unit of volatility. If you would invest  11,003  in Workiva on December 29, 2023 and sell it today you would lose (2,566) from holding Workiva or give up 23.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aurora Mobile  vs.  Workiva

 Performance 
       Timeline  
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.
Workiva 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Workiva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aurora Mobile and Workiva Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aurora Mobile and Workiva

The main advantage of trading using opposite Aurora Mobile and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, Workiva 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 Workiva will offset losses from the drop in Workiva's long position.
The idea behind Aurora Mobile and Workiva 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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