Correlation Between Xunlei and Salesforce

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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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Xunlei Ltd Adr  vs.  Salesforce

 Performance 
       Timeline  
Xunlei Ltd Adr 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Xunlei Ltd Adr has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Xunlei is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Salesforce 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Salesforce may actually be approaching a critical reversion point that can send shares even higher in April 2024.

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.
The idea behind Xunlei Ltd Adr and Salesforce pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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