Correlation Between ZW Data and AMTD Digital

Can any of the company-specific risk be diversified away by investing in both ZW Data and AMTD Digital 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 AMTD Digital 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 AMTD Digital, you can compare the effects of market volatilities on ZW Data and AMTD Digital 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 AMTD Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZW Data and AMTD Digital.

Diversification Opportunities for ZW Data and AMTD Digital

-0.05

Correlation Coefficient

ZW Data  AMTD Digital

Good diversification

The 3 months correlation between CNET and AMTD is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ZW Data Action and AMTD Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMTD Digital 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 AMTD Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMTD Digital has no effect on the direction of ZW Data i.e., ZW Data and AMTD Digital go up and down completely randomly.

Pair Corralation between ZW Data and AMTD Digital

Given the investment horizon of 90 days ZW Data Action is expected to under-perform the AMTD Digital. In addition to that, ZW Data is 1.34 times more volatile than AMTD Digital. It trades about -0.02 of its total potential returns per unit of risk. AMTD Digital is currently generating about -0.03 per unit of volatility. If you would invest  202.00  in AMTD Digital on May 6, 2025 and sell it today you would lose (35.00) from holding AMTD Digital or give up 17.33% of portfolio value over 90 days.

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

ZW Data Action  vs.  AMTD Digital

ZW Data Action

Risk-Adjusted Performance

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 uncertain 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.

AMTD Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMTD Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with ZW Data and AMTD Digital

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

The idea behind ZW Data Action and AMTD Digital 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.