Correlation Between Inspur Software and Caihong Display
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By analyzing existing cross correlation between Inspur Software Co and Caihong Display Devices, you can compare the effects of market volatilities on Inspur Software and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Caihong Display.
Diversification Opportunities for Inspur Software and Caihong Display
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inspur and Caihong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Inspur Software i.e., Inspur Software and Caihong Display go up and down completely randomly.
Pair Corralation between Inspur Software and Caihong Display
Assuming the 90 days trading horizon Inspur Software Co is expected to generate 1.44 times more return on investment than Caihong Display. However, Inspur Software is 1.44 times more volatile than Caihong Display Devices. It trades about -0.11 of its potential returns per unit of risk. Caihong Display Devices is currently generating about -0.16 per unit of risk. If you would invest 1,705 in Inspur Software Co on September 1, 2024 and sell it today you would lose (156.00) from holding Inspur Software Co or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspur Software Co vs. Caihong Display Devices
Performance |
| Timeline |
| Inspur Software |
| Caihong Display Devices |
Inspur Software and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspur Software and Caihong Display
The main advantage of trading using opposite Inspur Software and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Inspur Software vs. Shenyang Huitian Thermal | Inspur Software vs. Chahua Modern Housewares | Inspur Software vs. Western Mining Co | Inspur Software vs. Shengda Mining Co |
| Caihong Display vs. Eastroc Beverage Group | Caihong Display vs. Fujian Anjoy Foods | Caihong Display vs. Huatian Hotel Group | Caihong Display vs. Beijing Sanyuan Foods |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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