Correlation Between Globalfoundries and Xunlei
Can any of the company-specific risk be diversified away by investing in both Globalfoundries 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 Globalfoundries and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and Xunlei Ltd Adr, you can compare the effects of market volatilities on Globalfoundries 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 Globalfoundries with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Xunlei.
Diversification Opportunities for Globalfoundries and Xunlei
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Globalfoundries and Xunlei is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries 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 Globalfoundries 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 Globalfoundries 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 Globalfoundries i.e., Globalfoundries and Xunlei go up and down completely randomly.
Pair Corralation between Globalfoundries and Xunlei
Considering the 90-day investment horizon Globalfoundries is expected to under-perform the Xunlei. But the stock apears to be less risky and, when comparing its historical volatility, Globalfoundries is 1.3 times less risky than Xunlei. The stock trades about -0.01 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Xunlei Ltd Adr on October 22, 2024 and sell it today you would earn a total of 4.00 from holding Xunlei Ltd Adr or generate 1.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Globalfoundries vs. Xunlei Ltd Adr
Performance |
Timeline |
Globalfoundries |
Xunlei Ltd Adr |
Globalfoundries and Xunlei Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Globalfoundries and Xunlei
The main advantage of trading using opposite Globalfoundries and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries 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.Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |