Correlation Between ZW Data and ZhongAn Online

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

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

Diversification Opportunities for ZW Data and ZhongAn Online

0.8

Correlation Coefficient

ZW Data  ZhongAn Online

Very poor diversification

The 3 months correlation between CNET and ZhongAn is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ZW Data Action and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and ZW Data 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 ZW Data Action are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of ZW Data i.e., ZW Data and ZhongAn Online go up and down completely randomly.

Pair Corralation between ZW Data and ZhongAn Online

If you would invest  81.00  in ZW Data Action on March 15, 2024 and sell it today you would earn a total of  5.00  from holding ZW Data Action or generate 6.17% return on investment over 90 days.

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

ZW Data Action  vs.  ZhongAn Online P

ZW Data Action

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZW Data Action has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ZW Data and ZhongAn Online

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

The idea behind ZW Data Action and ZhongAn Online P 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.