Correlation Between Kingdee International and Inspire Medical

Can any of the company-specific risk be diversified away by investing in both Kingdee International and Inspire Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kingdee International and Inspire Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingdee International Software and Inspire Medical Systems, you can compare the effects of market volatilities on Kingdee International and Inspire Medical 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 Kingdee International with a short position of Inspire Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Inspire Medical.

Diversification Opportunities for Kingdee International and Inspire Medical

-0.52

Correlation Coefficient

Kingdee International  Inspire Medical

Excellent diversification

The 3 months correlation between Kingdee and Inspire is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems and Kingdee International 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 Kingdee International Software are associated (or correlated) with Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Kingdee International i.e., Kingdee International and Inspire Medical go up and down completely randomly.

Pair Corralation between Kingdee International and Inspire Medical

Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.33 times more return on investment than Inspire Medical. However, Kingdee International is 1.33 times more volatile than Inspire Medical Systems. It trades about 0.16 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about -0.12 per unit of risk. If you would invest  132.00  in Kingdee International Software on April 24, 2025 and sell it today you would earn a total of  45.00  from holding Kingdee International Software or generate 34.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kingdee International Software  vs.  Inspire Medical Systems

Kingdee International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

Inspire Medical Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inspire Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kingdee International and Inspire Medical

The main advantage of trading using opposite Kingdee International and Inspire Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Inspire Medical 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 Inspire Medical will offset losses from the drop in Inspire Medical's long position.

The idea behind Kingdee International Software and Inspire Medical Systems 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.