Correlation Between ZTO Express and Air T
Can any of the company-specific risk be diversified away by investing in both ZTO Express and Air T 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 ZTO Express and Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO Express and Air T Inc, you can compare the effects of market volatilities on ZTO Express and Air T 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 ZTO Express with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO Express and Air T.
Diversification Opportunities for ZTO Express and Air T
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ZTO and Air is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ZTO Express and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and ZTO Express 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 ZTO Express are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of ZTO Express i.e., ZTO Express and Air T go up and down completely randomly.
Pair Corralation between ZTO Express and Air T
Considering the 90-day investment horizon ZTO Express is expected to under-perform the Air T. But the stock apears to be less risky and, when comparing its historical volatility, ZTO Express is 2.56 times less risky than Air T. The stock trades about -0.01 of its potential returns per unit of risk. The Air T Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,705 in Air T Inc on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Air T Inc or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.15% |
| Values | Daily Returns |
ZTO Express vs. Air T Inc
Performance |
| Timeline |
| ZTO Express |
| Air T Inc |
ZTO Express and Air T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO Express and Air T
The main advantage of trading using opposite ZTO Express and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO Express position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.| ZTO Express vs. Forward Air | ZTO Express vs. Landstar System | ZTO Express vs. JB Hunt Transport | ZTO Express vs. Expeditors International of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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