Correlation Between Xunlei and WT Offshore
Can any of the company-specific risk be diversified away by investing in both Xunlei and WT Offshore 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 WT Offshore 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 WT Offshore, you can compare the effects of market volatilities on Xunlei and WT Offshore 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 WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and WT Offshore.
Diversification Opportunities for Xunlei and WT Offshore
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xunlei and WTI is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore 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 WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of Xunlei i.e., Xunlei and WT Offshore go up and down completely randomly.
Pair Corralation between Xunlei and WT Offshore
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 1.04 times more return on investment than WT Offshore. However, Xunlei is 1.04 times more volatile than WT Offshore. It trades about 0.01 of its potential returns per unit of risk. WT Offshore is currently generating about -0.05 per unit of risk. If you would invest 200.00 in Xunlei Ltd Adr on August 24, 2024 and sell it today you would lose (13.00) from holding Xunlei Ltd Adr or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. WT Offshore
Performance |
| Timeline |
| Xunlei Ltd Adr |
| WT Offshore |
Xunlei and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and WT Offshore
The main advantage of trading using opposite Xunlei and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, WT Offshore 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 WT Offshore will offset losses from the drop in WT Offshore's long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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