Correlation Between Inspire Medical and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Inspire Medical and Kingdee International 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 Inspire Medical and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspire Medical Systems and Kingdee International Software, you can compare the effects of market volatilities on Inspire Medical and Kingdee International 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 Inspire Medical with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspire Medical and Kingdee International.
Diversification Opportunities for Inspire Medical and Kingdee International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inspire and Kingdee is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Inspire Medical Systems and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and Inspire Medical 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 Inspire Medical Systems are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Inspire Medical i.e., Inspire Medical and Kingdee International go up and down completely randomly.
Pair Corralation between Inspire Medical and Kingdee International
Assuming the 90 days horizon Inspire Medical is expected to generate 43.13 times less return on investment than Kingdee International. But when comparing it to its historical volatility, Inspire Medical Systems is 1.26 times less risky than Kingdee International. It trades about 0.0 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Kingdee International Software on October 25, 2024 and sell it today you would earn a total of 14.00 from holding Kingdee International Software or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspire Medical Systems vs. Kingdee International Software
Performance |
| Timeline |
| Inspire Medical Systems |
| Kingdee International |
Inspire Medical and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspire Medical and Kingdee International
The main advantage of trading using opposite Inspire Medical and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspire Medical position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Inspire Medical vs. Lamar Advertising | Inspire Medical vs. GungHo Online Entertainment | Inspire Medical vs. Darden Restaurants | Inspire Medical vs. YATRA ONLINE DL 0001 |
| Kingdee International vs. American Eagle Outfitters | Kingdee International vs. GEAR4MUSIC LS 10 | Kingdee International vs. NTG Nordic Transport | Kingdee International vs. Warner Music Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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