Correlation Between Wuxi Xinhongye and Inspur Software
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By analyzing existing cross correlation between Wuxi Xinhongye Wire and Inspur Software Co, you can compare the effects of market volatilities on Wuxi Xinhongye and Inspur Software 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 Wuxi Xinhongye with a short position of Inspur Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Xinhongye and Inspur Software.
Diversification Opportunities for Wuxi Xinhongye and Inspur Software
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuxi and Inspur is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Xinhongye Wire and Inspur Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspur Software and Wuxi Xinhongye 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 Wuxi Xinhongye Wire are associated (or correlated) with Inspur Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspur Software has no effect on the direction of Wuxi Xinhongye i.e., Wuxi Xinhongye and Inspur Software go up and down completely randomly.
Pair Corralation between Wuxi Xinhongye and Inspur Software
Assuming the 90 days trading horizon Wuxi Xinhongye is expected to generate 1.56 times less return on investment than Inspur Software. But when comparing it to its historical volatility, Wuxi Xinhongye Wire is 1.21 times less risky than Inspur Software. It trades about 0.28 of its potential returns per unit of risk. Inspur Software Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,479 in Inspur Software Co on November 28, 2024 and sell it today you would earn a total of 363.00 from holding Inspur Software Co or generate 24.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuxi Xinhongye Wire vs. Inspur Software Co
Performance |
| Timeline |
| Wuxi Xinhongye Wire |
| Inspur Software |
Wuxi Xinhongye and Inspur Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Xinhongye and Inspur Software
The main advantage of trading using opposite Wuxi Xinhongye and Inspur Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Xinhongye position performs unexpectedly, Inspur Software 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 Inspur Software will offset losses from the drop in Inspur Software's long position.| Wuxi Xinhongye vs. Shaanxi Meineng Clean | Wuxi Xinhongye vs. China Eastern Airlines | Wuxi Xinhongye vs. Anji Foodstuff Co | Wuxi Xinhongye vs. Cansino Biologics |
| Inspur Software vs. Dongguan Tarry Electronics | Inspur Software vs. LianChuang Electronic Technology | Inspur Software vs. Taiji Computer Corp | Inspur Software vs. Aurora Optoelectronics Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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