Correlation Between Alarum Technologies and Xunlei
Can any of the company-specific risk be diversified away by investing in both Alarum Technologies 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 Alarum Technologies and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alarum Technologies and Xunlei Ltd Adr, you can compare the effects of market volatilities on Alarum Technologies 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 Alarum Technologies with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarum Technologies and Xunlei.
Diversification Opportunities for Alarum Technologies and Xunlei
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alarum and Xunlei is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies 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 Alarum Technologies 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 Alarum Technologies 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 Alarum Technologies i.e., Alarum Technologies and Xunlei go up and down completely randomly.
Pair Corralation between Alarum Technologies and Xunlei
Given the investment horizon of 90 days Alarum Technologies is expected to generate 1.72 times more return on investment than Xunlei. However, Alarum Technologies is 1.72 times more volatile than Xunlei Ltd Adr. It trades about 0.05 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.06 per unit of risk. If you would invest 1,234 in Alarum Technologies on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Alarum Technologies or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alarum Technologies vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Alarum Technologies |
| Xunlei Ltd Adr |
Alarum Technologies and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alarum Technologies and Xunlei
The main advantage of trading using opposite Alarum Technologies and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alarum Technologies 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.| Alarum Technologies vs. Palo Alto Networks | Alarum Technologies vs. GigaCloud Technology Class | Alarum Technologies vs. Pagaya Technologies | Alarum Technologies vs. Telos Corp |
| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |