Correlation Between Xunlei and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Xunlei and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Xunlei and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Cumberland Pharmaceuticals.
Diversification Opportunities for Xunlei and Cumberland Pharmaceuticals
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xunlei and Cumberland is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Xunlei i.e., Xunlei and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Xunlei and Cumberland Pharmaceuticals
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.78 times more return on investment than Cumberland Pharmaceuticals. However, Xunlei Ltd Adr is 1.29 times less risky than Cumberland Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Cumberland Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest 168.00 in Xunlei Ltd Adr on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Xunlei Ltd Adr or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Cumberland Pharmaceuticals |
Xunlei and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Cumberland Pharmaceuticals
The main advantage of trading using opposite Xunlei and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |