Correlation Between Fluent and ZW Data

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

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

Diversification Opportunities for Fluent and ZW Data

0.67

Correlation Coefficient

Fluent  ZW Data

Poor diversification

The 3 months correlation between Fluent and CNET is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc 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 Fluent 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 Fluent Inc 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 Fluent i.e., Fluent and ZW Data go up and down completely randomly.

Pair Corralation between Fluent and ZW Data

Given the investment horizon of 90 days Fluent is expected to generate 7.48 times less return on investment than ZW Data. But when comparing it to its historical volatility, Fluent Inc is 1.49 times less risky than ZW Data. It trades about 0.01 of its potential returns per unit of risk. ZW Data Action is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  161.00  in ZW Data Action on April 26, 2025 and sell it today you would earn a total of  2.00  from holding ZW Data Action or generate 1.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Fluent Inc  vs.  ZW Data Action

Fluent Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Fluent and ZW Data

The main advantage of trading using opposite Fluent and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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 Fluent Inc 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.