Correlation Between ZTO Express and Expeditors International
Can any of the company-specific risk be diversified away by investing in both ZTO Express and Expeditors International 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 Expeditors International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO Express and Expeditors International of, you can compare the effects of market volatilities on ZTO Express and Expeditors International 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 Expeditors International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO Express and Expeditors International.
Diversification Opportunities for ZTO Express and Expeditors International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZTO and Expeditors is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ZTO Express and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International 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 Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of ZTO Express i.e., ZTO Express and Expeditors International go up and down completely randomly.
Pair Corralation between ZTO Express and Expeditors International
Assuming the 90 days trading horizon ZTO Express is expected to under-perform the Expeditors International. In addition to that, ZTO Express is 1.24 times more volatile than Expeditors International of. It trades about -0.32 of its total potential returns per unit of risk. Expeditors International of is currently generating about 0.12 per unit of volatility. If you would invest 10,810 in Expeditors International of on September 1, 2024 and sell it today you would earn a total of 480.00 from holding Expeditors International of or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZTO Express vs. Expeditors International of
Performance |
| Timeline |
| ZTO Express |
| Expeditors International |
ZTO Express and Expeditors International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO Express and Expeditors International
The main advantage of trading using opposite ZTO Express and Expeditors International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO Express position performs unexpectedly, Expeditors International 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 Expeditors International will offset losses from the drop in Expeditors International's long position.| ZTO Express vs. Pure Storage | ZTO Express vs. Plastic Omnium | ZTO Express vs. Datang International Power | ZTO Express vs. Compagnie Plastic Omnium |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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