Correlation Between Xunlei and Air Products
Can any of the company-specific risk be diversified away by investing in both Xunlei and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on Xunlei and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Air Products.
Diversification Opportunities for Xunlei and Air Products
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xunlei and Air is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Xunlei i.e., Xunlei and Air Products go up and down completely randomly.
Pair Corralation between Xunlei and Air Products
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 2.0 times more return on investment than Air Products. However, Xunlei is 2.0 times more volatile than Air Products and. It trades about 0.01 of its potential returns per unit of risk. Air Products and is currently generating about 0.02 per unit of risk. If you would invest 207.00 in Xunlei Ltd Adr on August 29, 2024 and sell it today you would lose (12.00) from holding Xunlei Ltd Adr or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Air Products and
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Air Products |
Xunlei and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Air Products
The main advantage of trading using opposite Xunlei and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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