Correlation Between WiMi Hologram and Xunlei

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

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

Diversification Opportunities for WiMi Hologram and Xunlei

0.65

Correlation Coefficient

WiMi Hologram  Xunlei

Poor diversification

The 3 months correlation between WiMi and Xunlei is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud 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 WiMi Hologram 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 WiMi Hologram Cloud 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 WiMi Hologram i.e., WiMi Hologram and Xunlei go up and down completely randomly.

Pair Corralation between WiMi Hologram and Xunlei

Given the investment horizon of 90 days WiMi Hologram is expected to generate 1.54 times less return on investment than Xunlei. In addition to that, WiMi Hologram is 1.08 times more volatile than Xunlei Ltd Adr. It trades about 0.06 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about 0.1 per unit of volatility. If you would invest  158.00  in Xunlei Ltd Adr on September 2, 2024 and sell it today you would earn a total of  40.00  from holding Xunlei Ltd Adr or generate 25.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

WiMi Hologram Cloud  vs.  Xunlei Ltd Adr

WiMi Hologram Cloud

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, WiMi Hologram demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Xunlei Ltd Adr

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WiMi Hologram and Xunlei

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

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.