Correlation Between Xunlei and Usio

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

Diversification Opportunities for Xunlei and Usio

-0.51

Correlation Coefficient

Xunlei  Usio

Excellent diversification

The 3 months correlation between Xunlei and Usio is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Xunlei i.e., Xunlei and Usio go up and down completely randomly.

Pair Corralation between Xunlei and Usio

Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.94 times more return on investment than Usio. However, Xunlei Ltd Adr is 1.06 times less risky than Usio. It trades about 0.23 of its potential returns per unit of risk. Usio Inc is currently generating about 0.05 per unit of risk. If you would invest  213.00  in Xunlei Ltd Adr on December 28, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Xunlei Ltd Adr  vs.  Usio Inc

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.

Usio Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Usio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xunlei and Usio

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

The idea behind Xunlei Ltd Adr and Usio Inc 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.