Correlation Between Inspur Software and Biwin Storage
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By analyzing existing cross correlation between Inspur Software Co and Biwin Storage Technology, you can compare the effects of market volatilities on Inspur Software and Biwin Storage 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 Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inspur Software and Biwin Storage.
Diversification Opportunities for Inspur Software and Biwin Storage
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inspur and Biwin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inspur Software Co and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology 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 Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of Inspur Software i.e., Inspur Software and Biwin Storage go up and down completely randomly.
Pair Corralation between Inspur Software and Biwin Storage
Assuming the 90 days trading horizon Inspur Software Co is expected to generate 0.68 times more return on investment than Biwin Storage. However, Inspur Software Co is 1.47 times less risky than Biwin Storage. It trades about 0.35 of its potential returns per unit of risk. Biwin Storage Technology is currently generating about 0.1 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. Biwin Storage Technology
Performance |
| Timeline |
| Inspur Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biwin Storage Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inspur Software and Biwin Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inspur Software and Biwin Storage
The main advantage of trading using opposite Inspur Software and Biwin Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inspur Software position performs unexpectedly, Biwin Storage 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 Biwin Storage will offset losses from the drop in Biwin Storage's long position.The idea behind Inspur Software Co and Biwin Storage Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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