Correlation Between Global Blue and Aurora Mobile

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

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

Diversification Opportunities for Global Blue and Aurora Mobile

0.05

Correlation Coefficient

Global Blue  Aurora Mobile

Significant diversification

The 3 months correlation between Global and Aurora is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and Global Blue 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 Global Blue Group 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 Global Blue i.e., Global Blue and Aurora Mobile go up and down completely randomly.

Pair Corralation between Global Blue and Aurora Mobile

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 0.36 times more return on investment than Aurora Mobile. However, Global Blue Group is 2.8 times less risky than Aurora Mobile. It trades about 0.04 of its potential returns per unit of risk. Aurora Mobile is currently generating about -0.06 per unit of risk. If you would invest  721.00  in Global Blue Group on November 28, 2024 and sell it today you would earn a total of  11.00  from holding Global Blue Group or generate 1.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Global Blue Group  vs.  Aurora Mobile

Global Blue Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Global Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

Aurora Mobile

Risk-Adjusted Performance

Modest

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 uncertain technical and fundamental indicators, Aurora Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Blue and Aurora Mobile

The main advantage of trading using opposite Global Blue and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue 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 Global Blue Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.