Correlation Between Townsquare Media and Xunlei
Can any of the company-specific risk be diversified away by investing in both Townsquare Media 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 Townsquare Media and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Xunlei Ltd Adr, you can compare the effects of market volatilities on Townsquare Media 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 Townsquare Media with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Xunlei.
Diversification Opportunities for Townsquare Media and Xunlei
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Townsquare and Xunlei is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media 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 Townsquare Media 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 Townsquare Media 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 Townsquare Media i.e., Townsquare Media and Xunlei go up and down completely randomly.
Pair Corralation between Townsquare Media and Xunlei
Considering the 90-day investment horizon Townsquare Media is expected to generate 3.22 times less return on investment than Xunlei. But when comparing it to its historical volatility, Townsquare Media is 1.38 times less risky than Xunlei. It trades about 0.02 of its potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Xunlei Ltd Adr on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Xunlei Ltd Adr or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Townsquare Media vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Townsquare Media |
| Xunlei Ltd Adr |
Townsquare Media and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Xunlei
The main advantage of trading using opposite Townsquare Media and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media 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.| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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