Correlation Between MASSMU and Xunlei

Can any of the company-specific risk be diversified away by investing in both MASSMU 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 MASSMU and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MASSMU 5077 15 FEB 69 and Xunlei Ltd Adr, you can compare the effects of market volatilities on MASSMU 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 MASSMU with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of MASSMU and Xunlei.

Diversification Opportunities for MASSMU and Xunlei

0.04

Correlation Coefficient

MASSMU  Xunlei

Significant diversification

The 3 months correlation between MASSMU and Xunlei is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MASSMU 5077 15 FEB 69 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 MASSMU 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 MASSMU 5077 15 FEB 69 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 MASSMU i.e., MASSMU and Xunlei go up and down completely randomly.

Pair Corralation between MASSMU and Xunlei

Assuming the 90 days trading horizon MASSMU 5077 15 FEB 69 is expected to under-perform the Xunlei. But the bond apears to be less risky and, when comparing its historical volatility, MASSMU 5077 15 FEB 69 is 2.8 times less risky than Xunlei. The bond trades about -0.16 of its potential returns per unit of risk. The Xunlei Ltd Adr is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  174.00  in Xunlei Ltd Adr on September 26, 2024 and sell it today you would earn a total of  21.00  from holding Xunlei Ltd Adr or generate 12.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	22.22%
Values	Daily Returns

MASSMU 5077 15 FEB 69  vs.  Xunlei Ltd Adr

MASSMU 5077 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MASSMU 5077 15 FEB 69 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for MASSMU 5077 15 FEB 69 investors.

Xunlei Ltd Adr

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MASSMU and Xunlei

The main advantage of trading using opposite MASSMU and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MASSMU 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.

The idea behind MASSMU 5077 15 FEB 69 and Xunlei Ltd Adr 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..