Correlation Between ZINC MEDIA and ZTO Express
Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA 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 ZINC MEDIA and ZTO Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZINC MEDIA GR and ZTO Express, you can compare the effects of market volatilities on ZINC MEDIA 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 ZINC MEDIA with a short position of ZTO Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and ZTO Express.
Diversification Opportunities for ZINC MEDIA and ZTO Express
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZINC and ZTO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and ZTO Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO Express and ZINC MEDIA 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 ZINC MEDIA GR 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 ZINC MEDIA i.e., ZINC MEDIA and ZTO Express go up and down completely randomly.
Pair Corralation between ZINC MEDIA and ZTO Express
Assuming the 90 days trading horizon ZINC MEDIA GR is expected to under-perform the ZTO Express. In addition to that, ZINC MEDIA is 1.08 times more volatile than ZTO Express. It trades about -0.03 of its total potential returns per unit of risk. ZTO Express is currently generating about -0.02 per unit of volatility. If you would invest 2,398 in ZTO Express on November 1, 2024 and sell it today you would lose (638.00) from holding ZTO Express or give up 26.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ZINC MEDIA GR vs. ZTO Express
Performance |
| Timeline |
| ZINC MEDIA GR |
| ZTO Express |
ZINC MEDIA and ZTO Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZINC MEDIA and ZTO Express
The main advantage of trading using opposite ZINC MEDIA and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA 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.The idea behind ZINC MEDIA GR 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. United Parcel Service | ZTO Express vs. FedEx | ZTO Express vs. DSV Panalpina AS | ZTO Express vs. Bollor SE |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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