Correlation Between Xunlei and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Xunlei and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on Xunlei and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Software Acquisition.
Diversification Opportunities for Xunlei and Software Acquisition
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xunlei and Software is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Xunlei i.e., Xunlei and Software Acquisition go up and down completely randomly.
Pair Corralation between Xunlei and Software Acquisition
Given the investment horizon of 90 days Xunlei is expected to generate 1.17 times less return on investment than Software Acquisition. In addition to that, Xunlei is 1.7 times more volatile than Software Acquisition Group. It trades about 0.06 of its total potential returns per unit of risk. Software Acquisition Group is currently generating about 0.13 per unit of volatility. If you would invest 108.00 in Software Acquisition Group on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Software Acquisition Group or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Software Acquisition Group
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Software Acquisition |
Xunlei and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Software Acquisition
The main advantage of trading using opposite Xunlei and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition'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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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