Correlation Between Aurora Mobile and Compass
Can any of the company-specific risk be diversified away by investing in both Aurora Mobile and Compass 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 Compass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Mobile and Compass, you can compare the effects of market volatilities on Aurora Mobile and Compass 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 Compass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Mobile and Compass.
Diversification Opportunities for Aurora Mobile and Compass
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Compass is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Compass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass 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 Compass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Compass go up and down completely randomly.
Pair Corralation between Aurora Mobile and Compass
Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the Compass. In addition to that, Aurora Mobile is 1.2 times more volatile than Compass. It trades about -0.3 of its total potential returns per unit of risk. Compass is currently generating about 0.29 per unit of volatility. If you would invest 695.00 in Compass on May 22, 2025 and sell it today you would earn a total of 142.00 from holding Compass or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Mobile vs. Compass
Performance |
| Timeline |
| Aurora Mobile |
| Compass |
Aurora Mobile and Compass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Mobile and Compass
The main advantage of trading using opposite Aurora Mobile and Compass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, Compass 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 Compass will offset losses from the drop in Compass' long position.| Aurora Mobile vs. Townsquare Media | Aurora Mobile vs. Dolphin Entertainment | Aurora Mobile vs. Travelzoo | Aurora Mobile vs. Direct Digital Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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