Correlation Between LUMI GRUPPEN and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both LUMI GRUPPEN 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 LUMI GRUPPEN and ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUMI GRUPPEN AS and ZTO EXPRESS, you can compare the effects of market volatilities on LUMI GRUPPEN 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 LUMI GRUPPEN with a short position of ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUMI GRUPPEN and ZTO EXPRESS.
Diversification Opportunities for LUMI GRUPPEN and ZTO EXPRESS
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LUMI and ZTO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding LUMI GRUPPEN AS and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and LUMI GRUPPEN 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 LUMI GRUPPEN AS 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 LUMI GRUPPEN i.e., LUMI GRUPPEN and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between LUMI GRUPPEN and ZTO EXPRESS
Assuming the 90 days horizon LUMI GRUPPEN AS is expected to generate 4.46 times more return on investment than ZTO EXPRESS. However, LUMI GRUPPEN is 4.46 times more volatile than ZTO EXPRESS. It trades about 0.14 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.12 per unit of risk. If you would invest 85.00 in LUMI GRUPPEN AS on September 25, 2024 and sell it today you would earn a total of 13.00 from holding LUMI GRUPPEN AS or generate 15.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LUMI GRUPPEN AS vs. ZTO EXPRESS
Performance |
Timeline |
LUMI GRUPPEN AS |
ZTO EXPRESS |
LUMI GRUPPEN and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LUMI GRUPPEN and ZTO EXPRESS
The main advantage of trading using opposite LUMI GRUPPEN and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUMI GRUPPEN 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.LUMI GRUPPEN vs. Carsales | LUMI GRUPPEN vs. Materialise NV | LUMI GRUPPEN vs. Motorcar Parts of | LUMI GRUPPEN vs. EAGLE MATERIALS |
ZTO EXPRESS vs. EAT WELL INVESTMENT | ZTO EXPRESS vs. TOREX SEMICONDUCTOR LTD | ZTO EXPRESS vs. Taiwan Semiconductor Manufacturing | ZTO EXPRESS vs. ON SEMICONDUCTOR |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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