Correlation Between Armada Hflr and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and ZTO EXPRESS 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 Armada Hflr and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and ZTO EXPRESS, you can compare the effects of market volatilities on Armada Hflr and ZTO EXPRESS 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 Armada Hflr with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and ZTO EXPRESS.
Diversification Opportunities for Armada Hflr and ZTO EXPRESS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and ZTO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with ZTO EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTO EXPRESS has no effect on the direction of Armada Hflr i.e., Armada Hflr and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between Armada Hflr and ZTO EXPRESS
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the ZTO EXPRESS. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 2.12 times less risky than ZTO EXPRESS. The stock trades about -0.01 of its potential returns per unit of risk. The ZTO EXPRESS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,670 in ZTO EXPRESS on September 12, 2024 and sell it today you would earn a total of 100.00 from holding ZTO EXPRESS or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Armada Hflr Pr vs. ZTO EXPRESS
Performance |
| Timeline |
| Armada Hflr Pr |
| ZTO EXPRESS |
Armada Hflr and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and ZTO EXPRESS
The main advantage of trading using opposite Armada Hflr and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, ZTO EXPRESS 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 ZTO EXPRESS will offset losses from the drop in ZTO EXPRESS's long position.| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
| ZTO EXPRESS vs. NTG Nordic Transport | ZTO EXPRESS vs. Superior Plus Corp | ZTO EXPRESS vs. SIVERS SEMICONDUCTORS AB | ZTO EXPRESS vs. NorAm Drilling AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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