Correlation Between Entravision Communications and Xunlei
Can any of the company-specific risk be diversified away by investing in both Entravision Communications 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 Entravision Communications and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and Xunlei Ltd Adr, you can compare the effects of market volatilities on Entravision Communications 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 Entravision Communications with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Xunlei.
Diversification Opportunities for Entravision Communications and Xunlei
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entravision and Xunlei is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications 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 Entravision Communications 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 Entravision Communications 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 Entravision Communications i.e., Entravision Communications and Xunlei go up and down completely randomly.
Pair Corralation between Entravision Communications and Xunlei
Considering the 90-day investment horizon Entravision Communications is expected to generate 7.75 times less return on investment than Xunlei. In addition to that, Entravision Communications is 1.42 times more volatile than Xunlei Ltd Adr. It trades about 0.0 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.04 per unit of volatility. If you would invest 161.00 in Xunlei Ltd Adr on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Xunlei Ltd Adr or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entravision Communications vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Entravision Communications |
| Xunlei Ltd Adr |
Entravision Communications and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and Xunlei
The main advantage of trading using opposite Entravision Communications and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications 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.| Entravision Communications vs. Marchex | Entravision Communications vs. Direct Digital Holdings | Entravision Communications vs. Cimpress NV | Entravision Communications vs. Townsquare Media |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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