Correlation Between Aurora Mobile and Verint Systems

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

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

Diversification Opportunities for Aurora Mobile and Verint Systems

-0.58

Correlation Coefficient

Aurora Mobile  Verint Systems

Excellent diversification

The 3 months correlation between Aurora and Verint is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Mobile and Verint Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verint Systems 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 Verint Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verint Systems has no effect on the direction of Aurora Mobile i.e., Aurora Mobile and Verint Systems go up and down completely randomly.

Pair Corralation between Aurora Mobile and Verint Systems

Allowing for the 90-day total investment horizon Aurora Mobile is expected to generate 4.1 times more return on investment than Verint Systems. However, Aurora Mobile is 4.1 times more volatile than Verint Systems. It trades about 0.15 of its potential returns per unit of risk. Verint Systems is currently generating about -0.1 per unit of risk. If you would invest  422.00  in Aurora Mobile on September 1, 2024 and sell it today you would earn a total of  396.00  from holding Aurora Mobile or generate 93.84% return on investment over 90 days.

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

Aurora Mobile  vs.  Verint Systems

Aurora Mobile

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Aurora Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Verint Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verint Systems 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 basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aurora Mobile and Verint Systems

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

The idea behind Aurora Mobile and Verint Systems 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.