Correlation Between Xunlei and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Xunlei and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Xunlei and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Coca Cola.
Diversification Opportunities for Xunlei and Coca Cola
Average diversification
The 3 months correlation between Xunlei and Coca is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Xunlei i.e., Xunlei and Coca Cola go up and down completely randomly.
Pair Corralation between Xunlei and Coca Cola
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 2.69 times more return on investment than Coca Cola. However, Xunlei is 2.69 times more volatile than The Coca Cola. It trades about 0.06 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.07 per unit of risk. If you would invest 150.00 in Xunlei Ltd Adr on January 25, 2024 and sell it today you would earn a total of 6.00 from holding Xunlei Ltd Adr or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. The Coca Cola
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Coca Cola |
Xunlei and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Coca Cola
The main advantage of trading using opposite Xunlei and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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