Correlation Between Xunlei and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Xunlei and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical, you can compare the effects of market volatilities on Xunlei and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Eastman Chemical.
Diversification Opportunities for Xunlei and Eastman Chemical
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xunlei and Eastman is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Xunlei i.e., Xunlei and Eastman Chemical go up and down completely randomly.
Pair Corralation between Xunlei and Eastman Chemical
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 2.43 times more return on investment than Eastman Chemical. However, Xunlei is 2.43 times more volatile than Eastman Chemical. It trades about 0.04 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.05 per unit of risk. If you would invest 181.00 in Xunlei Ltd Adr on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Xunlei Ltd Adr or generate 9.39% 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. Eastman Chemical
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Eastman Chemical |
Xunlei and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Eastman Chemical
The main advantage of trading using opposite Xunlei and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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