Correlation Between Inspur Software and Sublime China
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By analyzing existing cross correlation between Inspur Software Co and Sublime China Information, you can compare the effects of market volatilities on Inspur Software and Sublime China 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 Sublime China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Sublime China.
Diversification Opportunities for Inspur Software and Sublime China
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inspur and Sublime is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Sublime China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sublime China 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 Sublime China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sublime China Information has no effect on the direction of Inspur Software i.e., Inspur Software and Sublime China go up and down completely randomly.
Pair Corralation between Inspur Software and Sublime China
Assuming the 90 days trading horizon Inspur Software is expected to generate 3.08 times less return on investment than Sublime China. But when comparing it to its historical volatility, Inspur Software Co is 3.21 times less risky than Sublime China. It trades about 0.35 of its potential returns per unit of risk. Sublime China Information is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 5,733 in Sublime China Information on November 7, 2024 and sell it today you would earn a total of 2,275 from holding Sublime China Information or generate 39.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspur Software Co vs. Sublime China Information
Performance |
| Timeline |
| Inspur Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sublime China Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Inspur Software and Sublime China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspur Software and Sublime China
The main advantage of trading using opposite Inspur Software and Sublime China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Sublime China 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 Sublime China will offset losses from the drop in Sublime China's long position.The idea behind Inspur Software Co and Sublime China 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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