Correlation Between Xunlei and Teradata Corp

Specify exactly 2 symbols:
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 Limited 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

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Xunlei and Teradata is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Limited 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 Limited 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 Limited is expected to under-perform the Teradata Corp. In addition to that, Xunlei is 1.51 times more volatile than Teradata Corp. It trades about 0.0 of its total potential returns per unit of risk. Teradata Corp is currently generating about 0.05 per unit of volatility. If you would invest  1,932  in Teradata Corp on April 4, 2022 and sell it today you would earn a total of  1,805  from holding Teradata Corp or generate 93.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Xunlei Limited  vs.  Teradata Corp

 Performance (%) 
      Timeline 
Xunlei Limited 
Xunlei Performance
0 of 100
Over the last 90 days Xunlei Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Xunlei Price Channel

Teradata Corp 
Teradata Performance
0 of 100
Over the last 90 days Teradata Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Teradata Price Channel

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.
The idea behind Xunlei Limited and Teradata Corp 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.
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 Bond Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go