Correlation Between ZTO Express and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both ZTO Express and Origin Agritech 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 Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO Express and Origin Agritech, you can compare the effects of market volatilities on ZTO Express and Origin Agritech 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 Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO Express and Origin Agritech.
Diversification Opportunities for ZTO Express and Origin Agritech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZTO and Origin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ZTO Express and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech 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 Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of ZTO Express i.e., ZTO Express and Origin Agritech go up and down completely randomly.
Pair Corralation between ZTO Express and Origin Agritech
Assuming the 90 days trading horizon ZTO Express is expected to under-perform the Origin Agritech. But the stock apears to be less risky and, when comparing its historical volatility, ZTO Express is 3.02 times less risky than Origin Agritech. The stock trades about -0.02 of its potential returns per unit of risk. The Origin Agritech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Origin Agritech on August 29, 2024 and sell it today you would lose (108.00) from holding Origin Agritech or give up 31.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZTO Express vs. Origin Agritech
Performance |
| Timeline |
| ZTO Express |
| Origin Agritech |
ZTO Express and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO Express and Origin Agritech
The main advantage of trading using opposite ZTO Express and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO Express position performs unexpectedly, Origin Agritech 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 Origin Agritech will offset losses from the drop in Origin Agritech's long position.| ZTO Express vs. PUBLIC STORAGE PRFO | ZTO Express vs. National Storage Affiliates | ZTO Express vs. MGIC INVESTMENT | ZTO Express vs. PennantPark Investment |
| Origin Agritech vs. Playtech plc | Origin Agritech vs. AAC TECHNOLOGHLDGADR | Origin Agritech vs. SCANDMEDICAL SOLDK 040 | Origin Agritech vs. ONWARD MEDICAL BV |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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