Correlation Between Penumbra and ZW Data

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

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

Diversification Opportunities for Penumbra and ZW Data

-0.26

Correlation Coefficient

Penumbra  ZW Data

Very good diversification

The 3 months correlation between Penumbra and CNET is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra 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 Penumbra 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 Penumbra 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 Penumbra i.e., Penumbra and ZW Data go up and down completely randomly.

Pair Corralation between Penumbra and ZW Data

Considering the 90-day investment horizon Penumbra is expected to under-perform the ZW Data. But the stock apears to be less risky and, when comparing its historical volatility, Penumbra is 3.6 times less risky than ZW Data. The stock trades about -0.07 of its potential returns per unit of risk. The ZW Data Action is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  146.00  in ZW Data Action on May 20, 2025 and sell it today you would lose (18.00) from holding ZW Data Action or give up 12.33% of portfolio value over 90 days.

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

Penumbra  vs.  ZW Data Action

Penumbra

Risk-Adjusted Performance

Weakest

Over the last 90 days Penumbra 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Penumbra and ZW Data

The main advantage of trading using opposite Penumbra and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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 Penumbra 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.