Correlation Between Goodyear Tire and ZEEKR Intelligent

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

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

Diversification Opportunities for Goodyear Tire and ZEEKR Intelligent

-0.29

Correlation Coefficient

Goodyear Tire  ZEEKR Intelligent

Very good diversification

The 3 months correlation between Goodyear and ZEEKR is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Tire Rubber and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Goodyear Tire 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 Goodyear Tire Rubber 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 Goodyear Tire i.e., Goodyear Tire and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Goodyear Tire and ZEEKR Intelligent

Allowing for the 90-day total investment horizon Goodyear Tire Rubber is expected to under-perform the ZEEKR Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, Goodyear Tire Rubber is 1.3 times less risky than ZEEKR Intelligent. The stock trades about -0.05 of its potential returns per unit of risk. The ZEEKR Intelligent Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,343  in ZEEKR Intelligent Technology on November 28, 2024 and sell it today you would earn a total of  232.00  from holding ZEEKR Intelligent Technology or generate 9.9% return on investment over 90 days.

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

Goodyear Tire Rubber  vs.  ZEEKR Intelligent Technology

Goodyear Tire Rubber

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goodyear Tire Rubber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goodyear Tire and ZEEKR Intelligent

The main advantage of trading using opposite Goodyear Tire and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Tire 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 Goodyear Tire Rubber 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.