Correlation Between Natera and ZTO Express

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

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

Diversification Opportunities for Natera and ZTO Express

-0.73

Correlation Coefficient

Natera  ZTO Express

Pay attention - limited upside

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

Pair Corralation between Natera and ZTO Express

Given the investment horizon of 90 days Natera Inc is expected to under-perform the ZTO Express. But the stock apears to be less risky and, when comparing its historical volatility, Natera Inc is 1.04 times less risky than ZTO Express. The stock trades about -0.1 of its potential returns per unit of risk. The ZTO Express is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,890  in ZTO Express on May 5, 2025 and sell it today you would earn a total of  133.00  from holding ZTO Express or generate 7.04% return on investment over 90 days.

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

Natera Inc  vs.  ZTO Express

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ZTO Express

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZTO Express are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, ZTO Express may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Natera and ZTO Express

The main advantage of trading using opposite Natera and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natera 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 Natera Inc 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.