Correlation Between Xunlei and Top KingWin

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

Diversification Opportunities for Xunlei and Top KingWin

0.22

Correlation Coefficient

Xunlei  Top KingWin

Modest diversification

The 3 months correlation between Xunlei and Top is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Top KingWin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Xunlei i.e., Xunlei and Top KingWin go up and down completely randomly.

Pair Corralation between Xunlei and Top KingWin

Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.42 times more return on investment than Top KingWin. However, Xunlei Ltd Adr is 2.38 times less risky than Top KingWin. It trades about 0.12 of its potential returns per unit of risk. Top KingWin is currently generating about -0.13 per unit of risk. If you would invest  195.00  in Xunlei Ltd Adr on September 28, 2024 and sell it today you would earn a total of  15.00  from holding Xunlei Ltd Adr or generate 7.69% return on investment over 90 days.

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

Xunlei Ltd Adr  vs.  Top KingWin

Xunlei Ltd Adr

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

Top KingWin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Top KingWin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Xunlei and Top KingWin

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

The idea behind Xunlei Ltd Adr and Top KingWin 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.