Correlation Between Aurora Mobile and Xunlei

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

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

Diversification Opportunities for Aurora Mobile and Xunlei

0.32

Correlation Coefficient

Aurora Mobile  Xunlei

Weak diversification

The 3 months correlation between Aurora and Xunlei is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Xunlei Ltd Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xunlei Ltd Adr 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 Xunlei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xunlei Ltd Adr has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Xunlei go up and down completely randomly.

Pair Corralation between Aurora Mobile and Xunlei

Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the Xunlei. In addition to that, Aurora Mobile is 1.51 times more volatile than Xunlei Ltd Adr. It trades about -0.12 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about -0.02 per unit of volatility. If you would invest  210.00  in Xunlei Ltd Adr on October 5, 2024 and sell it today you would lose (5.00) from holding Xunlei Ltd Adr or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aurora Mobile  vs.  Xunlei Ltd Adr

Aurora Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Xunlei Ltd Adr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xunlei Ltd Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Aurora Mobile and Xunlei

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

The idea behind Aurora Mobile and Xunlei Ltd Adr 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.