Correlation Between Aker ASA and Xunlei
Can any of the company-specific risk be diversified away by investing in both Aker ASA and Xunlei 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 Aker ASA and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker ASA and Xunlei Ltd Adr, you can compare the effects of market volatilities on Aker ASA and Xunlei 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 Aker ASA with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker ASA and Xunlei.
Diversification Opportunities for Aker ASA and Xunlei
Pay attention - limited upside
The 3 months correlation between Aker and Xunlei is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aker ASA and Xunlei Ltd Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xunlei Ltd Adr and Aker ASA 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 Aker ASA are associated (or correlated) with Xunlei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xunlei Ltd Adr has no effect on the direction of Aker ASA i.e., Aker ASA and Xunlei go up and down completely randomly.
Pair Corralation between Aker ASA and Xunlei
Assuming the 90 days horizon Aker ASA is expected to generate 5.47 times more return on investment than Xunlei. However, Aker ASA is 5.47 times more volatile than Xunlei Ltd Adr. It trades about 0.07 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.02 per unit of risk. If you would invest 3,258 in Aker ASA on September 12, 2024 and sell it today you would earn a total of 1,707 from holding Aker ASA or generate 52.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 68.89% |
| Values | Daily Returns |
Aker ASA vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Aker ASA |
| Xunlei Ltd Adr |
Aker ASA and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker ASA and Xunlei
The main advantage of trading using opposite Aker ASA and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker ASA position performs unexpectedly, Xunlei 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 Xunlei will offset losses from the drop in Xunlei's long position.| Aker ASA vs. Xunlei Ltd Adr | Aker ASA vs. Entravision Communications | Aker ASA vs. Deluxe | Aker ASA vs. Ispire Technology Common |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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