Correlation Between Sentage Holdings and ZW Data

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

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

Diversification Opportunities for Sentage Holdings and ZW Data

0.26

Correlation Coefficient

Sentage Holdings  ZW Data

Modest diversification

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

Pair Corralation between Sentage Holdings and ZW Data

Given the investment horizon of 90 days Sentage Holdings is expected to generate 1.33 times less return on investment than ZW Data. But when comparing it to its historical volatility, Sentage Holdings is 2.39 times less risky than ZW Data. It trades about 0.05 of its potential returns per unit of risk. ZW Data Action is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  161.00  in ZW Data Action on April 27, 2025 and sell it today you would lose (5.00) from holding ZW Data Action or give up 3.11% of portfolio value over 90 days.

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

Sentage Holdings  vs.  ZW Data Action

Sentage Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sentage Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sentage Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 Sentage Holdings and ZW Data

The main advantage of trading using opposite Sentage Holdings and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentage Holdings 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 Sentage Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.