Correlation Between ZTO EXPRESS and Kuehne Nagel

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

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

Diversification Opportunities for ZTO EXPRESS and Kuehne Nagel

0.59

Correlation Coefficient

ZTO EXPRESS  Kuehne Nagel

Very weak diversification

The 3 months correlation between ZTO and Kuehne is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ZTO EXPRESS and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna 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 Kuehne Nagel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of ZTO EXPRESS i.e., ZTO EXPRESS and Kuehne Nagel go up and down completely randomly.

Pair Corralation between ZTO EXPRESS and Kuehne Nagel

Assuming the 90 days trading horizon ZTO EXPRESS is expected to generate 0.86 times more return on investment than Kuehne Nagel. However, ZTO EXPRESS is 1.16 times less risky than Kuehne Nagel. It trades about 0.12 of its potential returns per unit of risk. Kuehne Nagel International is currently generating about -0.08 per unit of risk. If you would invest  1,820  in ZTO EXPRESS on September 24, 2024 and sell it today you would earn a total of  60.00  from holding ZTO EXPRESS or generate 3.3% return on investment over 90 days.

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

ZTO EXPRESS  vs.  Kuehne Nagel International

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. Despite nearly stable basic indicators, ZTO EXPRESS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kuehne Nagel Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuehne Nagel International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ZTO EXPRESS and Kuehne Nagel

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

The idea behind ZTO EXPRESS and Kuehne Nagel International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.