Correlation Between ZTO EXPRESS and Axfood AB

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

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

Diversification Opportunities for ZTO EXPRESS and Axfood AB

-0.48

Correlation Coefficient

ZTO EXPRESS  Axfood AB

Very good diversification

The 3 months correlation between ZTO and Axfood is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ZTO EXPRESS and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of ZTO EXPRESS i.e., ZTO EXPRESS and Axfood AB go up and down completely randomly.

Pair Corralation between ZTO EXPRESS and Axfood AB

Assuming the 90 days trading horizon ZTO EXPRESS is expected to under-perform the Axfood AB. In addition to that, ZTO EXPRESS is 1.4 times more volatile than Axfood AB. It trades about -0.01 of its total potential returns per unit of risk. Axfood AB is currently generating about 0.14 per unit of volatility. If you would invest  2,179  in Axfood AB on April 16, 2025 and sell it today you would earn a total of  342.00  from holding Axfood AB or generate 15.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

ZTO EXPRESS  vs.  Axfood AB

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Axfood AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axfood AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Axfood AB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZTO EXPRESS and Axfood AB

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

The idea behind ZTO EXPRESS and Axfood AB 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.