Correlation Between Smurfit Kappa and ZTO Express
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa 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 Smurfit Kappa and ZTO Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit Kappa Group and ZTO Express, you can compare the effects of market volatilities on Smurfit Kappa 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 Smurfit Kappa with a short position of ZTO Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and ZTO Express.
Diversification Opportunities for Smurfit Kappa and ZTO Express
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smurfit and ZTO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and ZTO Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO Express and Smurfit Kappa 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 Smurfit Kappa Group 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 Smurfit Kappa i.e., Smurfit Kappa and ZTO Express go up and down completely randomly.
Pair Corralation between Smurfit Kappa and ZTO Express
Assuming the 90 days horizon Smurfit Kappa Group is expected to generate 2.1 times more return on investment than ZTO Express. However, Smurfit Kappa is 2.1 times more volatile than ZTO Express. It trades about 0.32 of its potential returns per unit of risk. ZTO Express is currently generating about -0.41 per unit of risk. If you would invest 4,104 in Smurfit Kappa Group on August 30, 2024 and sell it today you would earn a total of 1,276 from holding Smurfit Kappa Group or generate 31.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. ZTO Express
Performance |
| Timeline |
| Smurfit Kappa Group |
| ZTO Express |
Smurfit Kappa and ZTO Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and ZTO Express
The main advantage of trading using opposite Smurfit Kappa and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa 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' long position.| Smurfit Kappa vs. Amcor plc | Smurfit Kappa vs. Packaging of | Smurfit Kappa vs. CCL Industries | Smurfit Kappa vs. AptarGroup |
| ZTO Express vs. PUBLIC STORAGE PRFO | ZTO Express vs. National Storage Affiliates | ZTO Express vs. MGIC INVESTMENT | ZTO Express vs. PennantPark 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 the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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