Correlation Between Nasdaq and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and ZTO EXPRESS, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and ZTO EXPRESS.
Diversification Opportunities for Nasdaq and ZTO EXPRESS
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and ZTO is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between Nasdaq and ZTO EXPRESS
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.37 times more return on investment than ZTO EXPRESS. However, Nasdaq Inc is 2.72 times less risky than ZTO EXPRESS. It trades about 0.14 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.02 per unit of risk. If you would invest 5,461 in Nasdaq Inc on September 12, 2024 and sell it today you would earn a total of 2,582 from holding Nasdaq Inc or generate 47.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Nasdaq Inc vs. ZTO EXPRESS
Performance |
| Timeline |
| Nasdaq Inc |
| ZTO EXPRESS |
Nasdaq and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and ZTO EXPRESS
The main advantage of trading using opposite Nasdaq and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and ZTO EXPRESS 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.| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |