Correlation Between Prosus NV and ZW Data

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

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

Diversification Opportunities for Prosus NV and ZW Data

0.12

Correlation Coefficient

Prosus NV  ZW Data

Average diversification

The 3 months correlation between Prosus and CNET is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV ADR 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 Prosus NV 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 Prosus NV ADR 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 Prosus NV i.e., Prosus NV and ZW Data go up and down completely randomly.

Pair Corralation between Prosus NV and ZW Data

Assuming the 90 days horizon Prosus NV ADR is expected to generate 0.19 times more return on investment than ZW Data. However, Prosus NV ADR is 5.18 times less risky than ZW Data. It trades about 0.17 of its potential returns per unit of risk. ZW Data Action is currently generating about 0.0 per unit of risk. If you would invest  1,026  in Prosus NV ADR on May 16, 2025 and sell it today you would earn a total of  164.00  from holding Prosus NV ADR or generate 15.98% return on investment over 90 days.

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

Prosus NV ADR  vs.  ZW Data Action

Prosus NV ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prosus NV ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Prosus NV showed solid returns over the last few months and may actually be approaching a breakup point.

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 Prosus NV and ZW Data

The main advantage of trading using opposite Prosus NV and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV 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 Prosus NV ADR 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..