Correlation Between Inspur Software and Maccura Biotechnology

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Can any of the company-specific risk be diversified away by investing in both Inspur Software and Maccura Biotechnology 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 Inspur Software and Maccura Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inspur Software Co and Maccura Biotechnology Co, you can compare the effects of market volatilities on Inspur Software and Maccura Biotechnology 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 Maccura Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Maccura Biotechnology.

Diversification Opportunities for Inspur Software and Maccura Biotechnology

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Inspur and Maccura is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Maccura Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maccura Biotechnology 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 Maccura Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maccura Biotechnology has no effect on the direction of Inspur Software i.e., Inspur Software and Maccura Biotechnology go up and down completely randomly.

Pair Corralation between Inspur Software and Maccura Biotechnology

Assuming the 90 days trading horizon Inspur Software Co is expected to generate 1.68 times more return on investment than Maccura Biotechnology. However, Inspur Software is 1.68 times more volatile than Maccura Biotechnology Co. It trades about -0.03 of its potential returns per unit of risk. Maccura Biotechnology Co is currently generating about -0.23 per unit of risk. If you would invest  1,549  in Inspur Software Co on October 30, 2024 and sell it today you would lose (70.00) from holding Inspur Software Co or give up 4.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Inspur Software Co  vs.  Maccura Biotechnology Co

 Performance 
       Timeline  
Inspur Software 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Inspur Software Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Maccura Biotechnology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Maccura Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Inspur Software and Maccura Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inspur Software and Maccura Biotechnology

The main advantage of trading using opposite Inspur Software and Maccura Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Maccura Biotechnology 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 Maccura Biotechnology will offset losses from the drop in Maccura Biotechnology's long position.
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The idea behind Inspur Software Co and Maccura Biotechnology Co 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.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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