Correlation Between Lucid and ZEEKR Intelligent

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

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

Diversification Opportunities for Lucid and ZEEKR Intelligent

-0.65

Correlation Coefficient

Lucid  ZEEKR Intelligent

Excellent diversification

The 3 months correlation between Lucid and ZEEKR is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Lucid 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 Lucid Group 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 Lucid i.e., Lucid and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Lucid and ZEEKR Intelligent

Given the investment horizon of 90 days Lucid Group is expected to under-perform the ZEEKR Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Group is 1.71 times less risky than ZEEKR Intelligent. The stock trades about -0.2 of its potential returns per unit of risk. The ZEEKR Intelligent Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,595  in ZEEKR Intelligent Technology on September 3, 2024 and sell it today you would earn a total of  748.00  from holding ZEEKR Intelligent Technology or generate 46.9% return on investment over 90 days.

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

Lucid Group  vs.  ZEEKR Intelligent Technology

Lucid Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ZEEKR Intelligent

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lucid and ZEEKR Intelligent

The main advantage of trading using opposite Lucid and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid 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 Lucid Group 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.