Correlation Between ZTO Express and Intel
Can any of the company-specific risk be diversified away by investing in both ZTO Express and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO Express and Intel, you can compare the effects of market volatilities on ZTO Express and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO Express and Intel.
Diversification Opportunities for ZTO Express and Intel
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZTO and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ZTO Express and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of ZTO Express i.e., ZTO Express and Intel go up and down completely randomly.
Pair Corralation between ZTO Express and Intel
Assuming the 90 days trading horizon ZTO Express is expected to under-perform the Intel. But the stock apears to be less risky and, when comparing its historical volatility, ZTO Express is 1.64 times less risky than Intel. The stock trades about -0.32 of its potential returns per unit of risk. The Intel is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,992 in Intel on September 1, 2024 and sell it today you would earn a total of 260.00 from holding Intel or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ZTO Express vs. Intel
Performance |
| Timeline |
| ZTO Express |
| Intel |
ZTO Express and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO Express and Intel
The main advantage of trading using opposite ZTO Express and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO Express position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel'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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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