Correlation Between Roblox Corp and ZEEKR Intelligent

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

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

Diversification Opportunities for Roblox Corp and ZEEKR Intelligent

-0.64

Correlation Coefficient

Roblox Corp  ZEEKR Intelligent

Excellent diversification

The 3 months correlation between Roblox and ZEEKR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Roblox Corp and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and Roblox Corp 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 Roblox Corp 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 Roblox Corp i.e., Roblox Corp and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between Roblox Corp and ZEEKR Intelligent

Given the investment horizon of 90 days Roblox Corp is expected to under-perform the ZEEKR Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, Roblox Corp is 1.89 times less risky than ZEEKR Intelligent. The stock trades about -0.02 of its potential returns per unit of risk. The ZEEKR Intelligent Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,731  in ZEEKR Intelligent Technology on December 19, 2024 and sell it today you would earn a total of  143.00  from holding ZEEKR Intelligent Technology or generate 5.24% return on investment over 90 days.

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

Roblox Corp  vs.  ZEEKR Intelligent Technology

Roblox Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roblox Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Roblox Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ZEEKR Intelligent

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 3 (%) 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 Roblox Corp and ZEEKR Intelligent

The main advantage of trading using opposite Roblox Corp and ZEEKR Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblox Corp 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 Roblox Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.