Correlation Between Global E and Xunlei
Can any of the company-specific risk be diversified away by investing in both Global E 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 Global E and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and Xunlei Ltd Adr, you can compare the effects of market volatilities on Global E 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 Global E with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Xunlei.
Diversification Opportunities for Global E and Xunlei
Very weak diversification
The 3 months correlation between Global and Xunlei is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online 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 Global E 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 Global E Online 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 Global E i.e., Global E and Xunlei go up and down completely randomly.
Pair Corralation between Global E and Xunlei
Given the investment horizon of 90 days Global E Online is expected to generate 0.9 times more return on investment than Xunlei. However, Global E Online is 1.11 times less risky than Xunlei. It trades about 0.07 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.04 per unit of risk. If you would invest 3,425 in Global E Online on August 26, 2024 and sell it today you would earn a total of 1,564 from holding Global E Online or generate 45.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Global E Online |
| Xunlei Ltd Adr |
Global E and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and Xunlei
The main advantage of trading using opposite Global E and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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