Correlation Between 48305QAB9 and Xunlei

Can any of the company-specific risk be diversified away by investing in both 48305QAB9 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 48305QAB9 and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US48305QAB95 and Xunlei Ltd Adr, you can compare the effects of market volatilities on 48305QAB9 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 48305QAB9 with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of 48305QAB9 and Xunlei.

Diversification Opportunities for 48305QAB9 and Xunlei

-0.31

Correlation Coefficient

48305QAB9  Xunlei

Very good diversification

The 3 months correlation between 48305QAB9 and Xunlei is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding US48305QAB95 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 48305QAB9 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 US48305QAB95 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 48305QAB9 i.e., 48305QAB9 and Xunlei go up and down completely randomly.

Pair Corralation between 48305QAB9 and Xunlei

Assuming the 90 days trading horizon US48305QAB95 is expected to generate 0.9 times more return on investment than Xunlei. However, US48305QAB95 is 1.12 times less risky than Xunlei. It trades about 0.11 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about -0.01 per unit of risk. If you would invest  9,674  in US48305QAB95 on October 12, 2024 and sell it today you would earn a total of  281.00  from holding US48305QAB95 or generate 2.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

US48305QAB95  vs.  Xunlei Ltd Adr

US48305QAB95

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US48305QAB95 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 48305QAB9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Xunlei Ltd Adr

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Xunlei may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 48305QAB9 and Xunlei

The main advantage of trading using opposite 48305QAB9 and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 48305QAB9 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 US48305QAB95 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 Commodity Directory module to find actively traded commodities issued by global exchanges.