Correlation Between ZeroFox Holdings and Aurora Mobile

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

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

Diversification Opportunities for ZeroFox Holdings and Aurora Mobile

-0.39

Correlation Coefficient

ZeroFox Holdings  Aurora Mobile

Very good diversification

The 3 months correlation between ZeroFox and Aurora is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ZeroFox Holdings and Aurora Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Mobile and ZeroFox Holdings 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 ZeroFox Holdings 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 ZeroFox Holdings i.e., ZeroFox Holdings and Aurora Mobile go up and down completely randomly.

Pair Corralation between ZeroFox Holdings and Aurora Mobile

If you would invest  482.00  in Aurora Mobile on September 16, 2024 and sell it today you would earn a total of  297.00  from holding Aurora Mobile or generate 61.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

ZeroFox Holdings  vs.  Aurora Mobile

ZeroFox Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZeroFox Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ZeroFox Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Aurora Mobile

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Mobile are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Aurora Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZeroFox Holdings and Aurora Mobile

The main advantage of trading using opposite ZeroFox Holdings and Aurora Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZeroFox Holdings 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 ZeroFox Holdings 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.

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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.