Correlation Between Cerberus Cyber and Xunlei

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

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

Diversification Opportunities for Cerberus Cyber and Xunlei

-0.47

Correlation Coefficient

Cerberus Cyber  Xunlei

Very good diversification

The 3 months correlation between Cerberus and Xunlei is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel 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 Cerberus Cyber 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 Cerberus Cyber Sentinel 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 Cerberus Cyber i.e., Cerberus Cyber and Xunlei go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Xunlei

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to under-perform the Xunlei. In addition to that, Cerberus Cyber is 1.67 times more volatile than Xunlei Ltd Adr. It trades about -0.14 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.28 per unit of volatility. If you would invest  195.00  in Xunlei Ltd Adr on December 21, 2024 and sell it today you would earn a total of  312.00  from holding Xunlei Ltd Adr or generate 160.0% return on investment over 90 days.

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

Cerberus Cyber Sentinel  vs.  Xunlei Ltd Adr

Cerberus Cyber Sentinel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cerberus Cyber Sentinel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Xunlei Ltd Adr

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerberus Cyber and Xunlei

The main advantage of trading using opposite Cerberus Cyber and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerberus Cyber 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 Cerberus Cyber Sentinel 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.