Correlation Between Aptiv PLC and ZEEKR Intelligent

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

By analyzing existing cross correlation between Aptiv PLC and ZEEKR Intelligent Technology, you can compare the effects of market volatilities on Aptiv PLC and ZEEKR Intelligent 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 Aptiv PLC with a short position of ZEEKR Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and ZEEKR Intelligent.

Diversification Opportunities for Aptiv PLC and ZEEKR Intelligent

-0.35

Correlation Coefficient

Aptiv PLC  ZEEKR Intelligent

Very good diversification

The 3 months correlation between Aptiv and ZEEKR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Aptiv PLC 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 Aptiv PLC are associated (or correlated) with ZEEKR Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZEEKR Intelligent has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Aptiv PLC and ZEEKR Intelligent

Given the investment horizon of 90 days Aptiv PLC is expected to generate 1.21 times less return on investment than ZEEKR Intelligent. But when comparing it to its historical volatility, Aptiv PLC is 3.31 times less risky than ZEEKR Intelligent. It trades about 0.1 of its potential returns per unit of risk. ZEEKR Intelligent Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,887  in ZEEKR Intelligent Technology on December 17, 2024 and sell it today you would earn a total of  121.00  from holding ZEEKR Intelligent Technology or generate 4.19% return on investment over 90 days.

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

Aptiv PLC  vs.  ZEEKR Intelligent Technology

Aptiv PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aptiv PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aptiv PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ZEEKR Intelligent

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, ZEEKR Intelligent may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aptiv PLC and ZEEKR Intelligent

The main advantage of trading using opposite Aptiv PLC and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, ZEEKR Intelligent 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 ZEEKR Intelligent will offset losses from the drop in ZEEKR Intelligent's long position.

The idea behind Aptiv PLC and ZEEKR Intelligent Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.