Correlation Between Xunlei and Salesforce
Can any of the company-specific risk be diversified away by investing in both Xunlei and Salesforce 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 Salesforce 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 Salesforce, you can compare the effects of market volatilities on Xunlei and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Salesforce.
Diversification Opportunities for Xunlei and Salesforce
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xunlei and Salesforce is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Xunlei i.e., Xunlei and Salesforce go up and down completely randomly.
Pair Corralation between Xunlei and Salesforce
Given the investment horizon of 90 days Xunlei is expected to generate 2.58 times less return on investment than Salesforce. In addition to that, Xunlei is 1.8 times more volatile than Salesforce. It trades about 0.02 of its total potential returns per unit of risk. Salesforce is currently generating about 0.1 per unit of volatility. If you would invest 14,613 in Salesforce on December 19, 2023 and sell it today you would earn a total of 15,438 from holding Salesforce or generate 105.65% 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. Salesforce
Performance |
Timeline |
Xunlei Ltd Adr |
Salesforce |
Xunlei and Salesforce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xunlei and Salesforce
The main advantage of trading using opposite Xunlei and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.Xunlei vs. Unity Software | Xunlei vs. Blackline | Xunlei vs. Dynatrace Holdings LLC | Xunlei vs. DoubleVerify 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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