Correlation Between Dixons Carphone and Xunlei
Can any of the company-specific risk be diversified away by investing in both Dixons Carphone 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 Dixons Carphone and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dixons Carphone plc and Xunlei Ltd Adr, you can compare the effects of market volatilities on Dixons Carphone 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 Dixons Carphone with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dixons Carphone and Xunlei.
Diversification Opportunities for Dixons Carphone and Xunlei
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dixons and Xunlei is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dixons Carphone plc 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 Dixons Carphone 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 Dixons Carphone plc 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 Dixons Carphone i.e., Dixons Carphone and Xunlei go up and down completely randomly.
Pair Corralation between Dixons Carphone and Xunlei
Assuming the 90 days horizon Dixons Carphone plc is expected to under-perform the Xunlei. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dixons Carphone plc is 2.48 times less risky than Xunlei. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Xunlei Ltd Adr on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Xunlei Ltd Adr or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dixons Carphone plc vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Dixons Carphone plc |
| Xunlei Ltd Adr |
Dixons Carphone and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dixons Carphone and Xunlei
The main advantage of trading using opposite Dixons Carphone and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dixons Carphone 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.| Dixons Carphone vs. RCS MediaGroup SpA | Dixons Carphone vs. Emerson Radio | Dixons Carphone vs. Cumulus Media Class | Dixons Carphone vs. PennantPark Investment |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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