Correlation Between Phoenix New and Xunlei
Can any of the company-specific risk be diversified away by investing in both Phoenix New 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 Phoenix New and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix New Media and Xunlei Ltd Adr, you can compare the effects of market volatilities on Phoenix New 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 Phoenix New with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and Xunlei.
Diversification Opportunities for Phoenix New and Xunlei
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Phoenix and Xunlei is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media 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 Phoenix New 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 Phoenix New Media 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 Phoenix New i.e., Phoenix New and Xunlei go up and down completely randomly.
Pair Corralation between Phoenix New and Xunlei
Given the investment horizon of 90 days Phoenix New Media is expected to generate 2.07 times more return on investment than Xunlei. However, Phoenix New is 2.07 times more volatile than Xunlei Ltd Adr. It trades about 0.04 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.01 per unit of risk. If you would invest 191.00 in Phoenix New Media on August 28, 2024 and sell it today you would earn a total of 72.00 from holding Phoenix New Media or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix New Media vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Phoenix New Media |
| Xunlei Ltd Adr |
Phoenix New and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix New and Xunlei
The main advantage of trading using opposite Phoenix New and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New 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.| Phoenix New vs. Alphabet Inc Class C | Phoenix New vs. Twilio Inc | Phoenix New vs. Snap Inc | Phoenix New vs. Baidu Inc |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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