Correlation Between Sabre Corpo and Xunlei

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Can any of the company-specific risk be diversified away by investing in both Sabre Corpo 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 Sabre Corpo and Xunlei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Corpo and Xunlei Ltd Adr, you can compare the effects of market volatilities on Sabre Corpo 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 Sabre Corpo with a short position of Xunlei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Corpo and Xunlei.

Diversification Opportunities for Sabre Corpo and Xunlei

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Sabre and Xunlei is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Corpo 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 Sabre Corpo 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 Sabre Corpo 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 Sabre Corpo i.e., Sabre Corpo and Xunlei go up and down completely randomly.

Pair Corralation between Sabre Corpo and Xunlei

Given the investment horizon of 90 days Sabre Corpo is expected to under-perform the Xunlei. In addition to that, Sabre Corpo is 1.59 times more volatile than Xunlei Ltd Adr. It trades about -0.02 of its total potential returns per unit of risk. Xunlei Ltd Adr is currently generating about -0.01 per unit of volatility. If you would invest  182.00  in Xunlei Ltd Adr on December 29, 2023 and sell it today you would lose (33.00) from holding Xunlei Ltd Adr or give up 18.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sabre Corpo  vs.  Xunlei Ltd Adr

 Performance 
       Timeline  
Sabre Corpo 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sabre Corpo has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Sabre Corpo and Xunlei Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sabre Corpo and Xunlei

The main advantage of trading using opposite Sabre Corpo and Xunlei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Corpo 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 Sabre Corpo 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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