Correlation Between Aurora Mobile and MicroAlgo

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

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

Diversification Opportunities for Aurora Mobile and MicroAlgo

-0.78

Correlation Coefficient

Aurora Mobile  MicroAlgo

Pay attention - limited upside

The 3 months correlation between Aurora and MicroAlgo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and MicroAlgo go up and down completely randomly.

Pair Corralation between Aurora Mobile and MicroAlgo

Allowing for the 90-day total investment horizon Aurora Mobile is expected to generate 0.3 times more return on investment than MicroAlgo. However, Aurora Mobile is 3.3 times less risky than MicroAlgo. It trades about 0.19 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.33 per unit of risk. If you would invest  780.00  in Aurora Mobile on April 21, 2025 and sell it today you would earn a total of  387.00  from holding Aurora Mobile or generate 49.62% return on investment over 90 days.

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

Aurora Mobile  vs.  MicroAlgo

Aurora Mobile

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Aurora Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

MicroAlgo

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aurora Mobile and MicroAlgo

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

The idea behind Aurora Mobile and MicroAlgo 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.