Correlation Between TonnerOne World and Aurora Mobile

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

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

Diversification Opportunities for TonnerOne World and Aurora Mobile

-0.05

Correlation Coefficient

TonnerOne World  Aurora Mobile

Good diversification

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

Pair Corralation between TonnerOne World and Aurora Mobile

Given the investment horizon of 90 days TonnerOne World Holdings is not expected to generate positive returns. However, TonnerOne World Holdings is 1.28 times less risky than Aurora Mobile. It waists most of its returns potential to compensate for thr risk taken. Aurora Mobile is generating about 0.09 per unit of risk. If you would invest  716.00  in Aurora Mobile on December 29, 2024 and sell it today you would earn a total of  330.00  from holding Aurora Mobile or generate 46.09% return on investment over 90 days.

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

TonnerOne World Holdings  vs.  Aurora Mobile

TonnerOne World Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days TonnerOne World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, TonnerOne World is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Aurora Mobile

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 7 (%) 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 TonnerOne World and Aurora Mobile

The main advantage of trading using opposite TonnerOne World and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TonnerOne World 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 TonnerOne World Holdings 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.