Correlation Between Xunlei and Aterian

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

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

Diversification Opportunities for Xunlei and Aterian

-0.2

Correlation Coefficient

Xunlei  Aterian

Good diversification

The 3 months correlation between Xunlei and Aterian is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Xunlei 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 Xunlei Ltd Adr are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Xunlei i.e., Xunlei and Aterian go up and down completely randomly.

Pair Corralation between Xunlei and Aterian

Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 1.02 times more return on investment than Aterian. However, Xunlei is 1.02 times more volatile than Aterian. It trades about 0.22 of its potential returns per unit of risk. Aterian is currently generating about 0.02 per unit of risk. If you would invest  213.00  in Xunlei Ltd Adr on December 29, 2024 and sell it today you would earn a total of  249.00  from holding Xunlei Ltd Adr or generate 116.9% return on investment over 90 days.

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

Xunlei Ltd Adr  vs.  Aterian

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 17 (%) 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.

Aterian

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aterian are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Aterian may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Xunlei and Aterian

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

The idea behind Xunlei Ltd Adr and Aterian 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.