Correlation Between Software Acquisition and Xunlei
Can any of the company-specific risk be diversified away by investing in both Software Acquisition 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 Software Acquisition and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Software Acquisition Group and Xunlei Ltd Adr, you can compare the effects of market volatilities on Software Acquisition 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 Software Acquisition with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Acquisition and Xunlei.
Diversification Opportunities for Software Acquisition and Xunlei
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Software and Xunlei is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group 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 Software Acquisition 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 Software Acquisition Group 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 Software Acquisition i.e., Software Acquisition and Xunlei go up and down completely randomly.
Pair Corralation between Software Acquisition and Xunlei
Given the investment horizon of 90 days Software Acquisition Group is expected to under-perform the Xunlei. In addition to that, Software Acquisition is 1.09 times more volatile than Xunlei Ltd Adr. It trades about -0.01 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.04 per unit of volatility. If you would invest 197.00 in Xunlei Ltd Adr on November 28, 2024 and sell it today you would earn a total of 91.00 from holding Xunlei Ltd Adr or generate 46.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Software Acquisition Group vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Software Acquisition |
| Xunlei Ltd Adr |
Software Acquisition and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Software Acquisition and Xunlei
The main advantage of trading using opposite Software Acquisition and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition 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.| Software Acquisition vs. Precision Drilling | Software Acquisition vs. Orbit Garant Drilling | Software Acquisition vs. Nabors Industries | Software Acquisition vs. Goosehead Insurance |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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