Correlation Between ATT and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and ZTO EXPRESS, you can compare the effects of market volatilities on ATT 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 ATT with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and ZTO EXPRESS.
Diversification Opportunities for ATT and ZTO EXPRESS
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ATT and ZTO is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and ATT 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 ATT Inc 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 ATT i.e., ATT and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between ATT and ZTO EXPRESS
Assuming the 90 days trading horizon ATT Inc is expected to generate 0.39 times more return on investment than ZTO EXPRESS. However, ATT Inc is 2.59 times less risky than ZTO EXPRESS. It trades about 0.16 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.01 per unit of risk. If you would invest 1,903 in ATT Inc on September 23, 2024 and sell it today you would earn a total of 275.00 from holding ATT Inc or generate 14.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ATT Inc vs. ZTO EXPRESS
Performance |
Timeline |
ATT Inc |
ZTO EXPRESS |
ATT and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATT and ZTO EXPRESS
The main advantage of trading using opposite ATT and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.The idea behind ATT Inc and ZTO EXPRESS 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.ZTO EXPRESS vs. Kuehne Nagel International | ZTO EXPRESS vs. NIKKON HOLDINGS TD | ZTO EXPRESS vs. SENKO GROUP HOLDINGS | ZTO EXPRESS vs. NTG Nordic Transport |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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