Correlation Between NetEase and ZW Data
Can any of the company-specific risk be diversified away by investing in both NetEase 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 NetEase and ZW Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetEase and ZW Data Action, you can compare the effects of market volatilities on NetEase 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 NetEase with a short position of ZW Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetEase and ZW Data.
Diversification Opportunities for NetEase and ZW Data
Very good diversification
The 3 months correlation between NetEase and CNET is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NetEase 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 NetEase 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 NetEase 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 NetEase i.e., NetEase and ZW Data go up and down completely randomly.
Pair Corralation between NetEase and ZW Data
Given the investment horizon of 90 days NetEase is expected to generate 0.31 times more return on investment than ZW Data. However, NetEase is 3.18 times less risky than ZW Data. It trades about 0.22 of its potential returns per unit of risk. ZW Data Action is currently generating about 0.06 per unit of risk. If you would invest 9,910 in NetEase on April 19, 2025 and sell it today you would earn a total of 3,409 from holding NetEase or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NetEase vs. ZW Data Action
Performance |
| Timeline |
| NetEase |
| ZW Data Action |
NetEase and ZW Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetEase and ZW Data
The main advantage of trading using opposite NetEase and ZW Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetEase 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.| NetEase vs. Bilibili | NetEase vs. Electronic Arts | NetEase vs. Take Two Interactive Software | NetEase vs. SohuCom |
| ZW Data vs. Baosheng Media Group | ZW Data vs. Lendway | ZW Data vs. Abits Group | ZW Data vs. Impact Fusion International |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |