Correlation Between Teradata Corp and Xunlei
Can any of the company-specific risk be diversified away by investing in both Teradata Corp and Xunlei 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 Teradata Corp and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and Xunlei Ltd Adr, you can compare the effects of market volatilities on Teradata Corp and Xunlei 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 Teradata Corp with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and Xunlei.
Diversification Opportunities for Teradata Corp and Xunlei
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teradata and Xunlei is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Xunlei Ltd Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xunlei Ltd Adr and Teradata Corp 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 Teradata Corp are associated (or correlated) with Xunlei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xunlei Ltd Adr has no effect on the direction of Teradata Corp i.e., Teradata Corp and Xunlei go up and down completely randomly.
Pair Corralation between Teradata Corp and Xunlei
Considering the 90-day investment horizon Teradata Corp is expected to under-perform the Xunlei. But the stock apears to be less risky and, when comparing its historical volatility, Teradata Corp is 1.01 times less risky than Xunlei. The stock trades about -0.18 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Xunlei Ltd Adr on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Xunlei Ltd Adr or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradata Corp vs. Xunlei Ltd Adr
Performance |
| Timeline |
| Teradata Corp |
| Xunlei Ltd Adr |
Teradata Corp and Xunlei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and Xunlei
The main advantage of trading using opposite Teradata Corp and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp position performs unexpectedly, Xunlei 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 Xunlei will offset losses from the drop in Xunlei's long position.| Teradata Corp vs. EverCommerce | Teradata Corp vs. i3 Verticals | Teradata Corp vs. Global Blue Group | Teradata Corp vs. Evertec |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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