Correlation Between Inspur Software and Shenzhen SDG
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By analyzing existing cross correlation between Inspur Software Co and Shenzhen SDG Information, you can compare the effects of market volatilities on Inspur Software and Shenzhen SDG 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 Inspur Software with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Shenzhen SDG.
Diversification Opportunities for Inspur Software and Shenzhen SDG
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inspur and Shenzhen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Inspur Software 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 Inspur Software Co are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Inspur Software i.e., Inspur Software and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Inspur Software and Shenzhen SDG
Assuming the 90 days trading horizon Inspur Software Co is expected to generate 0.87 times more return on investment than Shenzhen SDG. However, Inspur Software Co is 1.15 times less risky than Shenzhen SDG. It trades about 0.35 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about 0.2 per unit of risk. If you would invest 1,317 in Inspur Software Co on November 7, 2024 and sell it today you would earn a total of 162.00 from holding Inspur Software Co or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspur Software Co vs. Shenzhen SDG Information
Performance |
| Timeline |
| Inspur Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen SDG Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Inspur Software and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspur Software and Shenzhen SDG
The main advantage of trading using opposite Inspur Software and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG's long position.The idea behind Inspur Software Co and Shenzhen SDG Information 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.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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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