Correlation Between Aurora Mobile and CleanSpark

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

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

Diversification Opportunities for Aurora Mobile and CleanSpark

-0.5

Correlation Coefficient

Aurora Mobile  CleanSpark

Very good diversification

The 3 months correlation between Aurora and CleanSpark is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark 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 CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and CleanSpark go up and down completely randomly.

Pair Corralation between Aurora Mobile and CleanSpark

Allowing for the 90-day total investment horizon Aurora Mobile is expected to under-perform the CleanSpark. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Mobile is 1.44 times less risky than CleanSpark. The stock trades about -0.07 of its potential returns per unit of risk. The CleanSpark is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,589  in CleanSpark on February 4, 2024 and sell it today you would earn a total of  5.00  from holding CleanSpark or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Aurora Mobile  vs.  CleanSpark

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 weak 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.

CleanSpark

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Mobile and CleanSpark

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

The idea behind Aurora Mobile and CleanSpark 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.