Correlation Between Nio and ZEEKR Intelligent

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

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

Diversification Opportunities for Nio and ZEEKR Intelligent

0.6

Correlation Coefficient

Nio  ZEEKR Intelligent

Poor diversification

The 3 months correlation between Nio and ZEEKR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Nio 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 Nio Class A 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 Nio i.e., Nio and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Nio and ZEEKR Intelligent

Considering the 90-day investment horizon Nio Class A is expected to generate 0.88 times more return on investment than ZEEKR Intelligent. However, Nio Class A is 1.14 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  469.00  in Nio Class A on December 26, 2024 and sell it today you would lose (30.00) from holding Nio Class A or give up 6.4% of portfolio value over 90 days.

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

Nio Class A  vs.  ZEEKR Intelligent Technology

Nio Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nio Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Nio is not utilizing all of its potentials. The recent 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 weak 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 Nio and ZEEKR Intelligent

The main advantage of trading using opposite Nio and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio 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 Nio Class A 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.