Correlation Between China Asset and Inspur Software
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By analyzing existing cross correlation between China Asset Management and Inspur Software Co, you can compare the effects of market volatilities on China Asset 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 China Asset with a short position of Inspur Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Inspur Software.
Diversification Opportunities for China Asset and Inspur Software
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Inspur is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Inspur Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspur Software and China Asset 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 China Asset Management 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 China Asset i.e., China Asset and Inspur Software go up and down completely randomly.
Pair Corralation between China Asset and Inspur Software
Assuming the 90 days trading horizon China Asset Management is expected to generate 0.33 times more return on investment than Inspur Software. However, China Asset Management is 3.06 times less risky than Inspur Software. It trades about 0.46 of its potential returns per unit of risk. Inspur Software Co is currently generating about -0.26 per unit of risk. If you would invest 351.00 in China Asset Management on October 21, 2024 and sell it today you would earn a total of 29.00 from holding China Asset Management or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Asset Management vs. Inspur Software Co
Performance |
| Timeline |
| China Asset Management |
| Inspur Software |
China Asset and Inspur Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Asset and Inspur Software
The main advantage of trading using opposite China Asset and Inspur Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset 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.| China Asset vs. CGN Nuclear Technology | China Asset vs. Zhejiang Construction Investment | China Asset vs. Vanfund Urban Investment | China Asset vs. Dhc Software Co |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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