Correlation Between Xunlei and Alliance Recovery
Can any of the company-specific risk be diversified away by investing in both Xunlei and Alliance Recovery 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 Alliance Recovery 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 Alliance Recovery, you can compare the effects of market volatilities on Xunlei and Alliance Recovery 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 Alliance Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Alliance Recovery.
Diversification Opportunities for Xunlei and Alliance Recovery
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xunlei and Alliance is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Alliance Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Recovery 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 Alliance Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Recovery has no effect on the direction of Xunlei i.e., Xunlei and Alliance Recovery go up and down completely randomly.
Pair Corralation between Xunlei and Alliance Recovery
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.49 times more return on investment than Alliance Recovery. However, Xunlei Ltd Adr is 2.05 times less risky than Alliance Recovery. It trades about 0.02 of its potential returns per unit of risk. Alliance Recovery is currently generating about -0.02 per unit of risk. If you would invest 200.00 in Xunlei Ltd Adr on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Xunlei Ltd Adr or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Alliance Recovery
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Alliance Recovery |
Xunlei and Alliance Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Alliance Recovery
The main advantage of trading using opposite Xunlei and Alliance Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Alliance Recovery 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 Alliance Recovery will offset losses from the drop in Alliance Recovery's long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| Alliance Recovery vs. SmartStop Self Storage | Alliance Recovery vs. Xunlei Ltd Adr | Alliance Recovery vs. Fluent Inc | Alliance Recovery vs. Entravision Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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