Correlation Between Federal Home and Xunlei
Can any of the company-specific risk be diversified away by investing in both Federal Home 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 Federal Home and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Home 530 and Xunlei Ltd Adr, you can compare the effects of market volatilities on Federal Home 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 Federal Home with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Xunlei.
Diversification Opportunities for Federal Home and Xunlei
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federal and Xunlei is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home 530 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 Federal Home 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 Federal Home 530 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 Federal Home i.e., Federal Home and Xunlei go up and down completely randomly.
Pair Corralation between Federal Home and Xunlei
Assuming the 90 days horizon Federal Home 530 is expected to generate 1.33 times more return on investment than Xunlei. However, Federal Home is 1.33 times more volatile than Xunlei Ltd Adr. It trades about 0.09 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.07 per unit of risk. If you would invest 300.00 in Federal Home 530 on December 12, 2024 and sell it today you would earn a total of 1,350 from holding Federal Home 530 or generate 450.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Home 530 vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Federal Home 530 |
| Xunlei Ltd Adr |
Federal Home and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and Xunlei
The main advantage of trading using opposite Federal Home and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home 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.| Federal Home vs. Ryanair Holdings PLC | ||
| Federal Home vs. Sligro Food Group | ||
| Federal Home vs. NH Foods Ltd | ||
| Federal Home vs. WK Kellogg Co |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |