Correlation Between Xunlei and Golden Matrix

Can any of the company-specific risk be diversified away by investing in both Xunlei and Golden Matrix 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 Golden Matrix 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 Golden Matrix Group, you can compare the effects of market volatilities on Xunlei and Golden Matrix 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 Golden Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Golden Matrix.

Diversification Opportunities for Xunlei and Golden Matrix

-0.14

Correlation Coefficient

Xunlei  Golden Matrix

Good diversification

The 3 months correlation between Xunlei and Golden is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Golden Matrix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Matrix Group 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 Golden Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Matrix Group has no effect on the direction of Xunlei i.e., Xunlei and Golden Matrix go up and down completely randomly.

Pair Corralation between Xunlei and Golden Matrix

Given the investment horizon of 90 days Xunlei is expected to generate 1.55 times less return on investment than Golden Matrix. But when comparing it to its historical volatility, Xunlei Ltd Adr is 1.71 times less risky than Golden Matrix. It trades about 0.03 of its potential returns per unit of risk. Golden Matrix Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Golden Matrix Group on September 18, 2024 and sell it today you would lose (16.00) from holding Golden Matrix Group or give up 7.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Xunlei Ltd Adr  vs.  Golden Matrix Group

Xunlei Ltd Adr

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 9 (%) 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.

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Xunlei and Golden Matrix

The main advantage of trading using opposite Xunlei and Golden Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Golden Matrix 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 Golden Matrix will offset losses from the drop in Golden Matrix's long position.

The idea behind Xunlei Ltd Adr and Golden Matrix Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.