Correlation Between International Business and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both International Business and ZTO EXPRESS 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 International Business and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and ZTO EXPRESS, you can compare the effects of market volatilities on International Business and ZTO EXPRESS 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 International Business with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and ZTO EXPRESS.
Diversification Opportunities for International Business and ZTO EXPRESS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and ZTO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and International Business 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 International Business Machines are associated (or correlated) with ZTO EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTO EXPRESS has no effect on the direction of International Business i.e., International Business and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between International Business and ZTO EXPRESS
Assuming the 90 days trading horizon International Business Machines is expected to generate 0.47 times more return on investment than ZTO EXPRESS. However, International Business Machines is 2.13 times less risky than ZTO EXPRESS. It trades about 0.1 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.0 per unit of risk. If you would invest 12,016 in International Business Machines on September 23, 2024 and sell it today you would earn a total of 9,584 from holding International Business Machines or generate 79.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
International Business Machine vs. ZTO EXPRESS
Performance |
Timeline |
International Business |
ZTO EXPRESS |
International Business and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with International Business and ZTO EXPRESS
The main advantage of trading using opposite International Business and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, ZTO EXPRESS 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 ZTO EXPRESS will offset losses from the drop in ZTO EXPRESS's long position.International Business vs. AIR LIQUIDE ADR | International Business vs. SEALED AIR | International Business vs. Salesforce | International Business vs. Tradegate AG Wertpapierhandelsbank |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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