Correlation Between Xunlei and Evertec
Can any of the company-specific risk be diversified away by investing in both Xunlei and Evertec 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 Evertec 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 Evertec, you can compare the effects of market volatilities on Xunlei and Evertec 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 Evertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Evertec.
Diversification Opportunities for Xunlei and Evertec
Poor diversification
The 3 months correlation between Xunlei and Evertec is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec 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 Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Xunlei i.e., Xunlei and Evertec go up and down completely randomly.
Pair Corralation between Xunlei and Evertec
Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 4.32 times more return on investment than Evertec. However, Xunlei is 4.32 times more volatile than Evertec. It trades about 0.1 of its potential returns per unit of risk. Evertec is currently generating about 0.03 per unit of risk. If you would invest 388.00 in Xunlei Ltd Adr on April 25, 2025 and sell it today you would earn a total of 108.00 from holding Xunlei Ltd Adr or generate 27.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Xunlei Ltd Adr vs. Evertec
Performance |
Timeline |
Xunlei Ltd Adr |
Evertec |
Xunlei and Evertec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xunlei and Evertec
The main advantage of trading using opposite Xunlei and Evertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei position performs unexpectedly, Evertec 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 Evertec will offset losses from the drop in Evertec's long position.Xunlei vs. Townsquare Media | Xunlei vs. Dolphin Entertainment | Xunlei vs. Travelzoo | Xunlei vs. Direct Digital Holdings |
Evertec vs. NetScout Systems | Evertec vs. Consensus Cloud Solutions | Evertec vs. CSG Systems International | Evertec vs. ExlService Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |