Correlation Between Citigroup and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ZTO EXPRESS, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ZTO EXPRESS.
Diversification Opportunities for Citigroup and ZTO EXPRESS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and ZTO is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between Citigroup and ZTO EXPRESS
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.52 times more return on investment than ZTO EXPRESS. However, Citigroup is 1.92 times less risky than ZTO EXPRESS. It trades about 0.11 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.02 per unit of risk. If you would invest 4,788 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,462 from holding Citigroup or generate 51.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. ZTO EXPRESS
Performance |
| Timeline |
| Citigroup |
| ZTO EXPRESS |
Citigroup and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ZTO EXPRESS
The main advantage of trading using opposite Citigroup and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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