Correlation Between Xunlei and Hub Cyber

Can any of the company-specific risk be diversified away by investing in both Xunlei and Hub Cyber 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 Hub Cyber 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 Hub Cyber Security, you can compare the effects of market volatilities on Xunlei and Hub Cyber 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 Hub Cyber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Hub Cyber.

Diversification Opportunities for Xunlei and Hub Cyber

0.03

Correlation Coefficient

Xunlei  Hub Cyber

Significant diversification

The 3 months correlation between Xunlei and Hub is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Hub Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Cyber Security 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 Hub Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Cyber Security has no effect on the direction of Xunlei i.e., Xunlei and Hub Cyber go up and down completely randomly.

Pair Corralation between Xunlei and Hub Cyber

Given the investment horizon of 90 days Xunlei is expected to generate 155.25 times less return on investment than Hub Cyber. But when comparing it to its historical volatility, Xunlei Ltd Adr is 6.18 times less risky than Hub Cyber. It trades about 0.01 of its potential returns per unit of risk. Hub Cyber Security is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Hub Cyber Security on October 6, 2024 and sell it today you would earn a total of  30.00  from holding Hub Cyber Security or generate 63.83% return on investment over 90 days.

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

Xunlei Ltd Adr  vs.  Hub Cyber Security

Xunlei Ltd Adr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xunlei Ltd Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hub Cyber Security

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Cyber Security are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Hub Cyber exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xunlei and Hub Cyber

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

The idea behind Xunlei Ltd Adr and Hub Cyber Security 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.