Correlation Between AECOM TECHNOLOGY and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY 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 AECOM TECHNOLOGY and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and ZTO EXPRESS, you can compare the effects of market volatilities on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and ZTO EXPRESS.
Diversification Opportunities for AECOM TECHNOLOGY and ZTO EXPRESS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AECOM and ZTO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and ZTO EXPRESS
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the ZTO EXPRESS. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 1.19 times less risky than ZTO EXPRESS. The stock trades about -0.16 of its potential returns per unit of risk. The ZTO EXPRESS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,800 in ZTO EXPRESS on October 9, 2024 and sell it today you would earn a total of 50.00 from holding ZTO EXPRESS or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. ZTO EXPRESS
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| ZTO EXPRESS |
AECOM TECHNOLOGY and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and ZTO EXPRESS
The main advantage of trading using opposite AECOM TECHNOLOGY and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY 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.| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
| ZTO EXPRESS vs. Eidesvik Offshore ASA | ZTO EXPRESS vs. X FAB Silicon Foundries | ZTO EXPRESS vs. INDO RAMA SYNTHETIC | ZTO EXPRESS vs. CHEMICAL INDUSTRIES |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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