Correlation Between Apogee Enterprises and Xunlei

Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Xunlei 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 Apogee Enterprises and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apogee Enterprises and Xunlei Ltd Adr, you can compare the effects of market volatilities on Apogee Enterprises and Xunlei 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 Apogee Enterprises with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Xunlei.

Diversification Opportunities for Apogee Enterprises and Xunlei

0.37

Correlation Coefficient

Apogee Enterprises  Xunlei

Weak diversification

The 3 months correlation between Apogee and Xunlei is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Xunlei Ltd Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xunlei Ltd Adr and Apogee Enterprises 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 Apogee Enterprises are associated (or correlated) with Xunlei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xunlei Ltd Adr has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Xunlei go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Xunlei

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Xunlei. But the stock apears to be less risky and, when comparing its historical volatility, Apogee Enterprises is 2.39 times less risky than Xunlei. The stock trades about -0.48 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  189.00  in Xunlei Ltd Adr on September 27, 2024 and sell it today you would earn a total of  21.00  from holding Xunlei Ltd Adr or generate 11.11% return on investment over 90 days.

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

Apogee Enterprises  vs.  Xunlei Ltd Adr

Apogee Enterprises

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xunlei Ltd Adr

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and Xunlei

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

The idea behind Apogee Enterprises and Xunlei Ltd Adr 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.