Correlation Between Xunlei and Allegiant Travel
Can any of the company-specific risk be diversified away by investing in both Xunlei and Allegiant Travel 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 Xunlei and Allegiant Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xunlei Ltd Adr and Allegiant Travel, you can compare the effects of market volatilities on Xunlei and Allegiant Travel 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 Xunlei with a short position of Allegiant Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Allegiant Travel.
Diversification Opportunities for Xunlei and Allegiant Travel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xunlei and Allegiant is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Allegiant Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Travel and Xunlei 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 Xunlei Ltd Adr are associated (or correlated) with Allegiant Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Travel has no effect on the direction of Xunlei i.e., Xunlei and Allegiant Travel go up and down completely randomly.
Pair Corralation between Xunlei and Allegiant Travel
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 2.06 times more return on investment than Allegiant Travel. However, Xunlei is 2.06 times more volatile than Allegiant Travel. It trades about 0.33 of its potential returns per unit of risk. Allegiant Travel is currently generating about 0.24 per unit of risk. If you would invest 205.00 in Xunlei Ltd Adr on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Xunlei Ltd Adr or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Allegiant Travel
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Allegiant Travel |
Xunlei and Allegiant Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Allegiant Travel
The main advantage of trading using opposite Xunlei and Allegiant Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Allegiant Travel 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 Allegiant Travel will offset losses from the drop in Allegiant Travel's long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| Allegiant Travel vs. Azul SA | Allegiant Travel vs. Alaska Air Group | Allegiant Travel vs. International Consolidated Airlines | Allegiant Travel vs. Sun Country Airlines |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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