Correlation Between Taoping and Aurora Mobile
Can any of the company-specific risk be diversified away by investing in both Taoping 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 Taoping and Aurora Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taoping and Aurora Mobile, you can compare the effects of market volatilities on Taoping 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 Taoping with a short position of Aurora Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taoping and Aurora Mobile.
Diversification Opportunities for Taoping and Aurora Mobile
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taoping and Aurora is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taoping and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and Taoping 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 Taoping 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 Taoping i.e., Taoping and Aurora Mobile go up and down completely randomly.
Pair Corralation between Taoping and Aurora Mobile
Given the investment horizon of 90 days Taoping is expected to under-perform the Aurora Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Taoping is 1.24 times less risky than Aurora Mobile. The stock trades about -0.06 of its potential returns per unit of risk. The Aurora Mobile is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Aurora Mobile on November 5, 2024 and sell it today you would lose (595.00) from holding Aurora Mobile or give up 43.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taoping vs. Aurora Mobile
Performance |
| Timeline |
| Taoping |
| Aurora Mobile |
Taoping and Aurora Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taoping and Aurora Mobile
The main advantage of trading using opposite Taoping and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taoping 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.| Taoping vs. TonnerOne World Holdings | Taoping vs. Global Blue Group | Taoping vs. Bridgeline Digital | Taoping vs. Cerberus Cyber Sentinel |
| Aurora Mobile vs. GigaCloud Technology Class | Aurora Mobile vs. Arqit Quantum | Aurora Mobile vs. Telos Corp | Aurora Mobile vs. Cemtrex |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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