Correlation Between Globavend Holdings and ZTO Express

Can any of the company-specific risk be diversified away by investing in both Globavend Holdings 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 Globavend Holdings and ZTO Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globavend Holdings Limited and ZTO Express, you can compare the effects of market volatilities on Globavend Holdings 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 Globavend Holdings with a short position of ZTO Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globavend Holdings and ZTO Express.

Diversification Opportunities for Globavend Holdings and ZTO Express

0.71

Correlation Coefficient

Globavend Holdings  ZTO Express

Poor diversification

The 3 months correlation between Globavend and ZTO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Globavend Holdings Limited and ZTO Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO Express and Globavend Holdings 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 Globavend Holdings Limited 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 Globavend Holdings i.e., Globavend Holdings and ZTO Express go up and down completely randomly.

Pair Corralation between Globavend Holdings and ZTO Express

Considering the 90-day investment horizon Globavend Holdings Limited is expected to under-perform the ZTO Express. In addition to that, Globavend Holdings is 3.85 times more volatile than ZTO Express. It trades about -0.02 of its total potential returns per unit of risk. ZTO Express is currently generating about -0.02 per unit of volatility. If you would invest  2,670  in ZTO Express on October 10, 2024 and sell it today you would lose (761.00) from holding ZTO Express or give up 28.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	58.87%
Values	Daily Returns

Globavend Holdings Limited  vs.  ZTO Express

Globavend Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Globavend Holdings Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Globavend Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ZTO Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZTO Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Globavend Holdings and ZTO Express

The main advantage of trading using opposite Globavend Holdings and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globavend Holdings 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' long position.

The idea behind Globavend Holdings Limited 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.