Correlation Between Aurora Mobile and Fuse Science

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

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

Diversification Opportunities for Aurora Mobile and Fuse Science

-0.37

Correlation Coefficient

Aurora Mobile  Fuse Science

Very good diversification

The 3 months correlation between Aurora and Fuse is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Fuse Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuse Science 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 Fuse Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuse Science has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Fuse Science go up and down completely randomly.

Pair Corralation between Aurora Mobile and Fuse Science

Allowing for the 90-day total investment horizon Aurora Mobile is expected to generate 1.66 times more return on investment than Fuse Science. However, Aurora Mobile is 1.66 times more volatile than Fuse Science. It trades about 0.08 of its potential returns per unit of risk. Fuse Science is currently generating about -0.02 per unit of risk. If you would invest  819.00  in Aurora Mobile on November 27, 2024 and sell it today you would earn a total of  188.00  from holding Aurora Mobile or generate 22.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

Aurora Mobile  vs.  Fuse Science

Aurora Mobile

Risk-Adjusted Performance

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

Fuse Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fuse Science has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Aurora Mobile and Fuse Science

The main advantage of trading using opposite Aurora Mobile and Fuse Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Mobile position performs unexpectedly, Fuse Science 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 Fuse Science will offset losses from the drop in Fuse Science's long position.

The idea behind Aurora Mobile and Fuse Science 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.