Correlation Between Aurora Mobile and DigitalOcean Holdings
Can any of the company-specific risk be diversified away by investing in both Aurora Mobile and DigitalOcean Holdings 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 DigitalOcean Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Mobile and DigitalOcean Holdings, you can compare the effects of market volatilities on Aurora Mobile and DigitalOcean Holdings 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 DigitalOcean Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Mobile and DigitalOcean Holdings.
Diversification Opportunities for Aurora Mobile and DigitalOcean Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and DigitalOcean is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and DigitalOcean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalOcean Holdings 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 DigitalOcean Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalOcean Holdings has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and DigitalOcean Holdings go up and down completely randomly.
Pair Corralation between Aurora Mobile and DigitalOcean Holdings
Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the DigitalOcean Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Mobile is 1.47 times less risky than DigitalOcean Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The DigitalOcean Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,802 in DigitalOcean Holdings on June 1, 2025 and sell it today you would earn a total of 460.00 from holding DigitalOcean Holdings or generate 16.42% 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. DigitalOcean Holdings
Performance |
| Timeline |
| Aurora Mobile |
| DigitalOcean Holdings |
Aurora Mobile and DigitalOcean Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Mobile and DigitalOcean Holdings
The main advantage of trading using opposite Aurora Mobile and DigitalOcean Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, DigitalOcean Holdings 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 DigitalOcean Holdings will offset losses from the drop in DigitalOcean Holdings' long position.The idea behind Aurora Mobile and DigitalOcean Holdings 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.| DigitalOcean Holdings vs. Confluent | DigitalOcean Holdings vs. Cloudflare | DigitalOcean Holdings vs. Zscaler | DigitalOcean Holdings 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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