Correlation Between Rekor Systems and Aurora Mobile

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

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

Diversification Opportunities for Rekor Systems and Aurora Mobile

-0.39

Correlation Coefficient

Rekor Systems  Aurora Mobile

Very good diversification

The 3 months correlation between Rekor and Aurora is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rekor Systems and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and Rekor Systems 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 Rekor Systems 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 Rekor Systems i.e., Rekor Systems and Aurora Mobile go up and down completely randomly.

Pair Corralation between Rekor Systems and Aurora Mobile

Given the investment horizon of 90 days Rekor Systems is expected to under-perform the Aurora Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Rekor Systems is 2.15 times less risky than Aurora Mobile. The stock trades about -0.1 of its potential returns per unit of risk. The Aurora Mobile is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  465.00  in Aurora Mobile on September 13, 2024 and sell it today you would earn a total of  273.00  from holding Aurora Mobile or generate 58.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rekor Systems  vs.  Aurora Mobile

Rekor Systems

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aurora Mobile

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 9 (%) 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 Rekor Systems and Aurora Mobile

The main advantage of trading using opposite Rekor Systems and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rekor Systems 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 Rekor Systems 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.