Correlation Between Xunlei and Interpublic Group
Can any of the company-specific risk be diversified away by investing in both Xunlei and Interpublic Group 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 Interpublic Group 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 Interpublic Group of, you can compare the effects of market volatilities on Xunlei and Interpublic Group 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 Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Interpublic Group.
Diversification Opportunities for Xunlei and Interpublic Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xunlei and Interpublic is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group 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 Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of Xunlei i.e., Xunlei and Interpublic Group go up and down completely randomly.
Pair Corralation between Xunlei and Interpublic Group
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 2.7 times more return on investment than Interpublic Group. However, Xunlei is 2.7 times more volatile than Interpublic Group of. It trades about 0.06 of its potential returns per unit of risk. Interpublic Group of is currently generating about -0.04 per unit of risk. If you would invest 210.00 in Xunlei Ltd Adr on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Xunlei Ltd Adr or generate 2.38% 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. Interpublic Group of
Performance |
Timeline |
Xunlei Ltd Adr |
Interpublic Group |
Xunlei and Interpublic Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xunlei and Interpublic Group
The main advantage of trading using opposite Xunlei and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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