Correlation Between Braskem SA and Xunlei
Can any of the company-specific risk be diversified away by investing in both Braskem SA 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 Braskem SA and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA Class and Xunlei Ltd Adr, you can compare the effects of market volatilities on Braskem SA 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 Braskem SA with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Xunlei.
Diversification Opportunities for Braskem SA and Xunlei
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Xunlei is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class 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 Braskem SA 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 Braskem SA Class 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 Braskem SA i.e., Braskem SA and Xunlei go up and down completely randomly.
Pair Corralation between Braskem SA and Xunlei
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Xunlei. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 1.37 times less risky than Xunlei. The stock trades about -0.1 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Xunlei Ltd Adr on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Xunlei Ltd Adr or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Braskem SA Class |
| Xunlei Ltd Adr |
Braskem SA and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Xunlei
The main advantage of trading using opposite Braskem SA and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA 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.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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