Correlation Between Xunlei and Unisys
Can any of the company-specific risk be diversified away by investing in both Xunlei and Unisys 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 Unisys 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 Unisys, you can compare the effects of market volatilities on Xunlei and Unisys 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 Unisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Unisys.
Diversification Opportunities for Xunlei and Unisys
Good diversification
The 3 months correlation between Xunlei and Unisys is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys 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 Unisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys has no effect on the direction of Xunlei i.e., Xunlei and Unisys go up and down completely randomly.
Pair Corralation between Xunlei and Unisys
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.33 times more return on investment than Unisys. However, Xunlei Ltd Adr is 3.05 times less risky than Unisys. It trades about 0.04 of its potential returns per unit of risk. Unisys is currently generating about -0.06 per unit of risk. If you would invest 151.00 in Xunlei Ltd Adr on January 25, 2024 and sell it today you would earn a total of 5.00 from holding Xunlei Ltd Adr or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Unisys
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Unisys |
Xunlei and Unisys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Unisys
The main advantage of trading using opposite Xunlei and Unisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Unisys 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 Unisys will offset losses from the drop in Unisys' long position.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Direct Digital Holdings | Xunlei vs. Glory Star New |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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