Correlation Between ZhongAn Online and ZTO EXPRESS

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

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

Diversification Opportunities for ZhongAn Online and ZTO EXPRESS

-0.73

Correlation Coefficient

ZhongAn Online  ZTO EXPRESS

Pay attention - limited upside

The 3 months correlation between ZhongAn and ZTO is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS and ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and ZTO EXPRESS go up and down completely randomly.

Pair Corralation between ZhongAn Online and ZTO EXPRESS

Assuming the 90 days horizon ZhongAn Online P is expected to under-perform the ZTO EXPRESS. In addition to that, ZhongAn Online is 1.05 times more volatile than ZTO EXPRESS. It trades about -0.18 of its total potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.01 per unit of volatility. If you would invest  1,490  in ZTO EXPRESS on April 18, 2025 and sell it today you would earn a total of  0.00  from holding ZTO EXPRESS or generate 0.0% return on investment over 90 days.

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

ZhongAn Online P  vs.  ZTO EXPRESS

ZhongAn Online P

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZhongAn Online P are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZhongAn Online reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's basic 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 ZhongAn Online and ZTO EXPRESS

The main advantage of trading using opposite ZhongAn Online and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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 ZhongAn Online P 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.