Correlation Between Four Seasons and Xunlei
Can any of the company-specific risk be diversified away by investing in both Four Seasons 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 Four Seasons and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Seasons Education and Xunlei Ltd Adr, you can compare the effects of market volatilities on Four Seasons 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 Four Seasons with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Seasons and Xunlei.
Diversification Opportunities for Four Seasons and Xunlei
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Four and Xunlei is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Four Seasons Education 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 Four Seasons 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 Four Seasons Education 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 Four Seasons i.e., Four Seasons and Xunlei go up and down completely randomly.
Pair Corralation between Four Seasons and Xunlei
Given the investment horizon of 90 days Four Seasons Education is expected to generate 23.26 times more return on investment than Xunlei. However, Four Seasons is 23.26 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 0.05 per unit of risk. If you would invest 833.00 in Four Seasons Education on September 2, 2024 and sell it today you would earn a total of 219.00 from holding Four Seasons Education or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.03% |
| Values | Daily Returns |
Four Seasons Education vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Four Seasons Education |
| Xunlei Ltd Adr |
Four Seasons and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Seasons and Xunlei
The main advantage of trading using opposite Four Seasons and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Seasons 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.| Four Seasons vs. American Public Education | Four Seasons vs. ATA Creativity Global | Four Seasons vs. Cogna Educacao SA | Four Seasons vs. Adtalem Global Education |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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