Correlation Between Western Copper and Xunlei
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Xunlei Ltd Adr, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Xunlei.
Diversification Opportunities for Western Copper and Xunlei
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Xunlei is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and 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 Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and Xunlei go up and down completely randomly.
Pair Corralation between Western Copper and Xunlei
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Xunlei. In addition to that, Western Copper is 1.03 times more volatile than Xunlei Ltd Adr. It trades about -0.02 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 162.00 in Xunlei Ltd Adr on September 4, 2024 and sell it today you would earn a total of 52.00 from holding Xunlei Ltd Adr or generate 32.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Western Copper |
| Xunlei Ltd Adr |
Western Copper and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Xunlei
The main advantage of trading using opposite Western Copper and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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