Correlation Between ZTO Express and CTT -
Can any of the company-specific risk be diversified away by investing in both ZTO Express and CTT - 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 CTT - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO Express and CTT Correios, you can compare the effects of market volatilities on ZTO Express and CTT - 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 CTT -. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO Express and CTT -.
Diversification Opportunities for ZTO Express and CTT -
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZTO and CTT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ZTO Express and CTT Correios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios 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 CTT -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios has no effect on the direction of ZTO Express i.e., ZTO Express and CTT - go up and down completely randomly.
Pair Corralation between ZTO Express and CTT -
Assuming the 90 days trading horizon ZTO Express is expected to under-perform the CTT -. In addition to that, ZTO Express is 1.26 times more volatile than CTT Correios. It trades about -0.02 of its total potential returns per unit of risk. CTT Correios is currently generating about 0.06 per unit of volatility. If you would invest 328.00 in CTT Correios on October 16, 2024 and sell it today you would earn a total of 198.00 from holding CTT Correios or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ZTO Express vs. CTT Correios
Performance |
| Timeline |
| ZTO Express |
| CTT Correios |
ZTO Express and CTT - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO Express and CTT -
The main advantage of trading using opposite ZTO Express and CTT - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO Express position performs unexpectedly, CTT - 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 CTT - will offset losses from the drop in CTT -'s long position.The idea behind ZTO Express and CTT Correios 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.| CTT - vs. QBE Insurance Group | CTT - vs. China Reinsurance | CTT - vs. Tower Semiconductor | CTT - vs. Universal Insurance Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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