Correlation Between Modine Manufacturing and ZEEKR Intelligent

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

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

Diversification Opportunities for Modine Manufacturing and ZEEKR Intelligent

-0.43

Correlation Coefficient

Modine Manufacturing  ZEEKR Intelligent

Very good diversification

The 3 months correlation between Modine and ZEEKR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Modine Manufacturing and ZEEKR Intelligent

Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the ZEEKR Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, Modine Manufacturing is 1.77 times less risky than ZEEKR Intelligent. The stock trades about -0.14 of its potential returns per unit of risk. The ZEEKR Intelligent Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,830  in ZEEKR Intelligent Technology on October 12, 2024 and sell it today you would earn a total of  6.00  from holding ZEEKR Intelligent Technology or generate 0.21% return on investment over 90 days.

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

Modine Manufacturing  vs.  ZEEKR Intelligent Technology

Modine Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Modine Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Modine Manufacturing is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ZEEKR Intelligent

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Modine Manufacturing and ZEEKR Intelligent

The main advantage of trading using opposite Modine Manufacturing and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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 Modine Manufacturing 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.