Correlation Between Tenaris SA and Xunlei
Can any of the company-specific risk be diversified away by investing in both Tenaris SA 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 Tenaris SA and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA ADR and Xunlei Ltd Adr, you can compare the effects of market volatilities on Tenaris SA 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 Tenaris SA with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and Xunlei.
Diversification Opportunities for Tenaris SA and Xunlei
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tenaris and Xunlei is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA ADR 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 Tenaris SA 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 Tenaris SA ADR 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 Tenaris SA i.e., Tenaris SA and Xunlei go up and down completely randomly.
Pair Corralation between Tenaris SA and Xunlei
Allowing for the 90-day total investment horizon Tenaris SA is expected to generate 13.94 times less return on investment than Xunlei. But when comparing it to its historical volatility, Tenaris SA ADR is 3.64 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 0.28 of returns per unit of risk over similar time horizon. If you would invest 210.00 in Xunlei Ltd Adr on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Xunlei Ltd Adr or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA ADR vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Tenaris SA ADR |
| Xunlei Ltd Adr |
Tenaris SA and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and Xunlei
The main advantage of trading using opposite Tenaris SA and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA 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.| Tenaris SA vs. TechnipFMC PLC | Tenaris SA vs. Now Inc | Tenaris SA vs. ChampionX | Tenaris SA vs. Baker Hughes 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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