Correlation Between ZW Data and Lendway

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

Diversification Opportunities for ZW Data and Lendway

-0.37

Correlation Coefficient

ZW Data  Lendway

Very good diversification

The 3 months correlation between CNET and Lendway is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ZW Data Action and Lendway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendway 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 Lendway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendway has no effect on the direction of ZW Data i.e., ZW Data and Lendway go up and down completely randomly.

Pair Corralation between ZW Data and Lendway

Given the investment horizon of 90 days ZW Data is expected to generate 2.3 times less return on investment than Lendway. In addition to that, ZW Data is 1.8 times more volatile than Lendway. It trades about 0.03 of its total potential returns per unit of risk. Lendway is currently generating about 0.11 per unit of volatility. If you would invest  399.00  in Lendway on April 28, 2025 and sell it today you would earn a total of  109.00  from holding Lendway or generate 27.32% return on investment over 90 days.

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

ZW Data Action  vs.  Lendway

ZW Data Action

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZW Data Action are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, ZW Data unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lendway

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lendway are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Lendway showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZW Data and Lendway

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

The idea behind ZW Data Action and Lendway 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.