Correlation Between Arqit Quantum and Aurora Mobile

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

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

Diversification Opportunities for Arqit Quantum and Aurora Mobile

-0.01

Correlation Coefficient

Arqit Quantum  Aurora Mobile

Good diversification

The 3 months correlation between Arqit and Aurora is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and Arqit Quantum 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 Arqit Quantum 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 Arqit Quantum i.e., Arqit Quantum and Aurora Mobile go up and down completely randomly.

Pair Corralation between Arqit Quantum and Aurora Mobile

Given the investment horizon of 90 days Arqit Quantum is expected to generate 1.94 times more return on investment than Aurora Mobile. However, Arqit Quantum is 1.94 times more volatile than Aurora Mobile. It trades about 0.12 of its potential returns per unit of risk. Aurora Mobile is currently generating about -0.01 per unit of risk. If you would invest  1,661  in Arqit Quantum on February 20, 2025 and sell it today you would earn a total of  1,149  from holding Arqit Quantum or generate 69.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Arqit Quantum  vs.  Aurora Mobile

Arqit Quantum

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Arqit Quantum reported solid returns over the last few months and may actually be approaching a breakup point.

Aurora Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aurora Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Aurora Mobile is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Arqit Quantum and Aurora Mobile

The main advantage of trading using opposite Arqit Quantum and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arqit Quantum 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 Arqit Quantum 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.