Correlation Between Everbright Digital and ZW Data

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

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

Diversification Opportunities for Everbright Digital and ZW Data

-0.28

Correlation Coefficient

Everbright Digital  ZW Data

Very good diversification

The 3 months correlation between Everbright and CNET is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Everbright Digital Holding and ZW Data Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZW Data Action and Everbright Digital 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 Everbright Digital Holding are associated (or correlated) with ZW Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZW Data Action has no effect on the direction of Everbright Digital i.e., Everbright Digital and ZW Data go up and down completely randomly.

Pair Corralation between Everbright Digital and ZW Data

Given the investment horizon of 90 days Everbright Digital Holding is expected to under-perform the ZW Data. In addition to that, Everbright Digital is 1.53 times more volatile than ZW Data Action. It trades about -0.16 of its total potential returns per unit of risk. ZW Data Action is currently generating about 0.01 per unit of volatility. If you would invest  152.00  in ZW Data Action on May 14, 2025 and sell it today you would lose (19.00) from holding ZW Data Action or give up 12.5% of portfolio value over 90 days.

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

Everbright Digital Holding  vs.  ZW Data Action

Everbright Digital

Risk-Adjusted Performance

Weakest

Over the last 90 days Everbright Digital Holding 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 technical indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ZW Data Action

Risk-Adjusted Performance

Weakest

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 comparatively stable technical and fundamental indicators, ZW Data is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Everbright Digital and ZW Data

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

The idea behind Everbright Digital Holding and ZW Data Action 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.