Correlation Between Inspur Software and Air China
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By analyzing existing cross correlation between Inspur Software Co and Air China Ltd, you can compare the effects of market volatilities on Inspur Software and Air 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 Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Air China.
Diversification Opportunities for Inspur Software and Air China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inspur and Air is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China 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 Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China has no effect on the direction of Inspur Software i.e., Inspur Software and Air China go up and down completely randomly.
Pair Corralation between Inspur Software and Air China
Assuming the 90 days trading horizon Inspur Software Co is expected to generate 1.56 times more return on investment than Air China. However, Inspur Software is 1.56 times more volatile than Air China Ltd. It trades about 0.01 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.03 per unit of risk. If you would invest 1,618 in Inspur Software Co on November 7, 2024 and sell it today you would lose (139.00) from holding Inspur Software Co or give up 8.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inspur Software Co vs. Air China Ltd
Performance |
| Timeline |
| Inspur Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Air China |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inspur Software and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspur Software and Air China
The main advantage of trading using opposite Inspur Software and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Air 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 Air China will offset losses from the drop in Air China's long position.The idea behind Inspur Software Co and Air China Ltd 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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