Correlation Between ZTO EXPRESS and SENKO GROUP

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

By analyzing existing cross correlation between ZTO EXPRESS and SENKO GROUP HOLDINGS, you can compare the effects of market volatilities on ZTO EXPRESS and SENKO GROUP 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 SENKO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZTO EXPRESS and SENKO GROUP.

Diversification Opportunities for ZTO EXPRESS and SENKO GROUP

-0.09

Correlation Coefficient

ZTO EXPRESS  SENKO GROUP

Good diversification

The 3 months correlation between ZTO and SENKO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ZTO EXPRESS and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS 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 SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of ZTO EXPRESS i.e., ZTO EXPRESS and SENKO GROUP go up and down completely randomly.

Pair Corralation between ZTO EXPRESS and SENKO GROUP

Assuming the 90 days trading horizon ZTO EXPRESS is expected to generate 4.74 times less return on investment than SENKO GROUP. In addition to that, ZTO EXPRESS is 1.37 times more volatile than SENKO GROUP HOLDINGS. It trades about 0.01 of its total potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about 0.05 per unit of volatility. If you would invest  905.00  in SENKO GROUP HOLDINGS on December 25, 2024 and sell it today you would earn a total of  40.00  from holding SENKO GROUP HOLDINGS or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ZTO EXPRESS  vs.  SENKO GROUP HOLDINGS

ZTO EXPRESS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZTO EXPRESS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ZTO EXPRESS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

SENKO GROUP HOLDINGS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SENKO GROUP HOLDINGS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SENKO GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ZTO EXPRESS and SENKO GROUP

The main advantage of trading using opposite ZTO EXPRESS and SENKO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZTO EXPRESS position performs unexpectedly, SENKO GROUP 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 SENKO GROUP will offset losses from the drop in SENKO GROUP's long position.

The idea behind ZTO EXPRESS and SENKO GROUP HOLDINGS 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.

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