Correlation Between Xunlei and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Xunlei and Hertz Global 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 Hertz Global 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 Hertz Global Holdings, you can compare the effects of market volatilities on Xunlei and Hertz Global 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 Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Hertz Global.
Diversification Opportunities for Xunlei and Hertz Global
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xunlei and Hertz is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings 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 Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of Xunlei i.e., Xunlei and Hertz Global go up and down completely randomly.
Pair Corralation between Xunlei and Hertz Global
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.66 times more return on investment than Hertz Global. However, Xunlei Ltd Adr is 1.52 times less risky than Hertz Global. It trades about 0.06 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about -0.03 per unit of risk. If you would invest 149.00 in Xunlei Ltd Adr on September 14, 2024 and sell it today you would earn a total of 61.00 from holding Xunlei Ltd Adr or generate 40.94% 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. Hertz Global Holdings
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Hertz Global Holdings |
Xunlei and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Hertz Global
The main advantage of trading using opposite Xunlei and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global'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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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