Correlation Between Xunlei and Glimpse

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

Diversification Opportunities for Xunlei and Glimpse

-0.01

Correlation Coefficient

Xunlei  Glimpse

Good diversification

The 3 months correlation between Xunlei and Glimpse is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Glimpse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glimpse 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 Glimpse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glimpse Group has no effect on the direction of Xunlei i.e., Xunlei and Glimpse go up and down completely randomly.

Pair Corralation between Xunlei and Glimpse

Given the investment horizon of 90 days Xunlei is expected to generate 3.52 times less return on investment than Glimpse. But when comparing it to its historical volatility, Xunlei Ltd Adr is 3.9 times less risky than Glimpse. It trades about 0.15 of its potential returns per unit of risk. Glimpse Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  70.00  in Glimpse Group on November 28, 2024 and sell it today you would earn a total of  75.00  from holding Glimpse Group or generate 107.14% 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.  Glimpse Group

Xunlei Ltd Adr

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 11 (%) 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.

Glimpse Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glimpse Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Glimpse reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xunlei and Glimpse

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

The idea behind Xunlei Ltd Adr and Glimpse Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .