Correlation Between Xunlei and ServiceNow

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

Diversification Opportunities for Xunlei and ServiceNow

0.46

Correlation Coefficient

Xunlei  ServiceNow

Very weak diversification

The 3 months correlation between Xunlei and ServiceNow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow 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 ServiceNow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServiceNow has no effect on the direction of Xunlei i.e., Xunlei and ServiceNow go up and down completely randomly.

Pair Corralation between Xunlei and ServiceNow

Given the investment horizon of 90 days Xunlei Ltd Adr is expected to generate 3.69 times more return on investment than ServiceNow. However, Xunlei is 3.69 times more volatile than ServiceNow. It trades about 0.04 of its potential returns per unit of risk. ServiceNow is currently generating about 0.01 per unit of risk. If you would invest  451.00  in Xunlei Ltd Adr on May 2, 2025 and sell it today you would earn a total of  11.00  from holding Xunlei Ltd Adr or generate 2.44% return on investment over 90 days.

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

Xunlei Ltd Adr  vs.  ServiceNow

Xunlei Ltd Adr

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xunlei Ltd Adr are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Xunlei unveiled solid returns over the last few months and may actually be approaching a breakup point.

ServiceNow

Risk-Adjusted Performance

Very Weak

Over the last 90 days ServiceNow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ServiceNow is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xunlei and ServiceNow

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

The idea behind Xunlei Ltd Adr and ServiceNow 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.