Correlation Between Caihong Display and Inspur Software
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By analyzing existing cross correlation between Caihong Display Devices and Inspur Software Co, you can compare the effects of market volatilities on Caihong Display 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 Caihong Display with a short position of Inspur Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Inspur Software.
Diversification Opportunities for Caihong Display and Inspur Software
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Inspur is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Inspur Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspur Software and Caihong Display 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 Caihong Display Devices 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 Caihong Display i.e., Caihong Display and Inspur Software go up and down completely randomly.
Pair Corralation between Caihong Display and Inspur Software
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Inspur Software. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.53 times less risky than Inspur Software. The stock trades about -0.11 of its potential returns per unit of risk. The Inspur Software Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,548 in Inspur Software Co on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Inspur Software Co or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Inspur Software Co
Performance |
| Timeline |
| Caihong Display Devices |
| Inspur Software |
Caihong Display and Inspur Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Inspur Software
The main advantage of trading using opposite Caihong Display and Inspur Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display 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.| Caihong Display vs. Agricultural Bank of | Caihong Display vs. China Construction Bank | Caihong Display vs. Postal Savings Bank | Caihong Display vs. Bank of Communications |
| Inspur Software vs. Agricultural Bank of | Inspur Software vs. China Construction Bank | Inspur Software vs. Postal Savings Bank | Inspur Software vs. Bank of Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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