Correlation Between Ihuman and Xunlei
Can any of the company-specific risk be diversified away by investing in both Ihuman 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 Ihuman and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Xunlei Ltd Adr, you can compare the effects of market volatilities on Ihuman 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 Ihuman with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Xunlei.
Diversification Opportunities for Ihuman and Xunlei
Poor diversification
The 3 months correlation between Ihuman and Xunlei is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc 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 Ihuman 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 Ihuman Inc 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 Ihuman i.e., Ihuman and Xunlei go up and down completely randomly.
Pair Corralation between Ihuman and Xunlei
Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 1.31 times more return on investment than Xunlei. However, Ihuman is 1.31 times more volatile than Xunlei Ltd Adr. It trades about 0.02 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.02 per unit of risk. If you would invest 185.00 in Ihuman Inc on September 2, 2024 and sell it today you would lose (20.00) from holding Ihuman Inc or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Ihuman Inc |
| Xunlei Ltd Adr |
Ihuman and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Xunlei
The main advantage of trading using opposite Ihuman and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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.| Ihuman vs. Wah Fu Education | Ihuman vs. Golden Sun Education | Ihuman vs. Elite Education Group | Ihuman vs. American Public 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |