Correlation Between ZTO EXPRESS and NIKKON HOLDINGS
Can any of the company-specific risk be diversified away by investing in both ZTO EXPRESS and NIKKON HOLDINGS 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 NIKKON HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZTO EXPRESS and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on ZTO EXPRESS and NIKKON HOLDINGS 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 NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO EXPRESS and NIKKON HOLDINGS.
Diversification Opportunities for ZTO EXPRESS and NIKKON HOLDINGS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZTO and NIKKON is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ZTO EXPRESS and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD 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 NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of ZTO EXPRESS i.e., ZTO EXPRESS and NIKKON HOLDINGS go up and down completely randomly.
Pair Corralation between ZTO EXPRESS and NIKKON HOLDINGS
Assuming the 90 days trading horizon ZTO EXPRESS is expected to generate 4.7 times less return on investment than NIKKON HOLDINGS. In addition to that, ZTO EXPRESS is 1.98 times more volatile than NIKKON HOLDINGS TD. It trades about 0.01 of its total potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.05 per unit of volatility. If you would invest 975.00 in NIKKON HOLDINGS TD on September 12, 2024 and sell it today you would earn a total of 265.00 from holding NIKKON HOLDINGS TD or generate 27.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZTO EXPRESS vs. NIKKON HOLDINGS TD
Performance |
| Timeline |
| ZTO EXPRESS |
| NIKKON HOLDINGS TD |
ZTO EXPRESS and NIKKON HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZTO EXPRESS and NIKKON HOLDINGS
The main advantage of trading using opposite ZTO EXPRESS and NIKKON HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO EXPRESS position performs unexpectedly, NIKKON HOLDINGS 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 NIKKON HOLDINGS will offset losses from the drop in NIKKON HOLDINGS's long position.| ZTO EXPRESS vs. NTG Nordic Transport | ZTO EXPRESS vs. Superior Plus Corp | ZTO EXPRESS vs. SIVERS SEMICONDUCTORS AB | ZTO EXPRESS vs. NorAm Drilling AS |
| NIKKON HOLDINGS vs. NTG Nordic Transport | NIKKON HOLDINGS vs. Superior Plus Corp | NIKKON HOLDINGS vs. SIVERS SEMICONDUCTORS AB | NIKKON HOLDINGS vs. NorAm Drilling AS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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