Correlation Between Xunlei and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Xunlei and Teradata Corp 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 Teradata Corp 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 Teradata Corp, you can compare the effects of market volatilities on Xunlei and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Teradata Corp.
Diversification Opportunities for Xunlei and Teradata Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xunlei and Teradata is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Xunlei i.e., Xunlei and Teradata Corp go up and down completely randomly.
Pair Corralation between Xunlei and Teradata Corp
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 0.85 times more return on investment than Teradata Corp. However, Xunlei Ltd Adr is 1.17 times less risky than Teradata Corp. It trades about -0.08 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.13 per unit of risk. If you would invest 151.00 in Xunlei Ltd Adr on January 20, 2024 and sell it today you would lose (3.00) from holding Xunlei Ltd Adr or give up 1.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Xunlei Ltd Adr vs. Teradata Corp
Performance |
Timeline |
Xunlei Ltd Adr |
Teradata Corp |
Xunlei and Teradata Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xunlei and Teradata Corp
The main advantage of trading using opposite Xunlei and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.Xunlei vs. Interpublic Group of | Xunlei vs. Criteo Sa | Xunlei vs. WPP PLC ADR | Xunlei vs. Integral Ad Science |
Teradata Corp vs. Block Inc | Teradata Corp vs. Adobe Systems Incorporated | Teradata Corp vs. Crowdstrike Holdings | Teradata Corp vs. Cloudflare |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |