Correlation Between VNET Group and ZTO Express

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

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

Diversification Opportunities for VNET Group and ZTO Express

0.68

Correlation Coefficient

VNET Group  ZTO Express

Poor diversification

The 3 months correlation between VNET and ZTO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC and ZTO Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO Express and VNET Group 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 VNET Group DRC 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 VNET Group i.e., VNET Group and ZTO Express go up and down completely randomly.

Pair Corralation between VNET Group and ZTO Express

Given the investment horizon of 90 days VNET Group DRC is expected to generate 2.63 times more return on investment than ZTO Express. However, VNET Group is 2.63 times more volatile than ZTO Express. It trades about 0.05 of its potential returns per unit of risk. ZTO Express is currently generating about 0.06 per unit of risk. If you would invest  696.00  in VNET Group DRC on May 4, 2025 and sell it today you would earn a total of  53.00  from holding VNET Group DRC or generate 7.61% return on investment over 90 days.

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

VNET Group DRC  vs.  ZTO Express

VNET Group DRC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VNET Group DRC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, VNET Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 VNET Group and ZTO Express

The main advantage of trading using opposite VNET Group and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group 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 VNET Group DRC 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.

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 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.