Correlation Between Financial Street and Inspur Software
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By analyzing existing cross correlation between Financial Street Holdings and Inspur Software Co, you can compare the effects of market volatilities on Financial Street and Inspur Software 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 Financial Street with a short position of Inspur Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Street and Inspur Software.
Diversification Opportunities for Financial Street and Inspur Software
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Financial and Inspur is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Financial Street Holdings and Inspur Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspur Software and Financial Street 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 Financial Street Holdings are associated (or correlated) with Inspur Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspur Software has no effect on the direction of Financial Street i.e., Financial Street and Inspur Software go up and down completely randomly.
Pair Corralation between Financial Street and Inspur Software
Assuming the 90 days trading horizon Financial Street Holdings is expected to under-perform the Inspur Software. But the stock apears to be less risky and, when comparing its historical volatility, Financial Street Holdings is 1.08 times less risky than Inspur Software. The stock trades about -0.12 of its potential returns per unit of risk. The Inspur Software Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,501 in Inspur Software Co on November 23, 2024 and sell it today you would earn a total of 225.00 from holding Inspur Software Co or generate 14.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Financial Street Holdings vs. Inspur Software Co
Performance |
Timeline |
Financial Street Holdings |
Inspur Software |
Financial Street and Inspur Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Financial Street and Inspur Software
The main advantage of trading using opposite Financial Street and Inspur Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Street position performs unexpectedly, Inspur Software 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 Inspur Software will offset losses from the drop in Inspur Software's long position.Financial Street vs. Ningbo Homelink Eco iTech | ||
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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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