Correlation Between GM and ZEEKR Intelligent

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

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

Diversification Opportunities for GM and ZEEKR Intelligent

0.24

Correlation Coefficient

GM  ZEEKR Intelligent

Modest diversification

The 3 months correlation between GM and ZEEKR is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and GM 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 General Motors 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 GM i.e., GM and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between GM and ZEEKR Intelligent

Allowing for the 90-day total investment horizon General Motors is expected to generate 0.52 times more return on investment than ZEEKR Intelligent. However, General Motors is 1.94 times less risky than ZEEKR Intelligent. It trades about -0.01 of its potential returns per unit of risk. ZEEKR Intelligent Technology is currently generating about -0.05 per unit of risk. If you would invest  5,404  in General Motors on December 25, 2024 and sell it today you would lose (145.00) from holding General Motors or give up 2.68% of portfolio value over 90 days.

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

General Motors  vs.  ZEEKR Intelligent Technology

General Motors

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, GM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ZEEKR Intelligent

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZEEKR Intelligent Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GM and ZEEKR Intelligent

The main advantage of trading using opposite GM and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.