Correlation Between ZEEKR Intelligent and Cadence Design

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

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

Diversification Opportunities for ZEEKR Intelligent and Cadence Design

0.32

Correlation Coefficient

ZEEKR Intelligent  Cadence Design

Weak diversification

The 3 months correlation between ZEEKR and Cadence is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and ZEEKR Intelligent 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 ZEEKR Intelligent Technology are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Cadence Design go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Cadence Design

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 4.01 times more return on investment than Cadence Design. However, ZEEKR Intelligent is 4.01 times more volatile than Cadence Design Systems. It trades about 0.09 of its potential returns per unit of risk. Cadence Design Systems is currently generating about 0.01 per unit of risk. If you would invest  2,517  in ZEEKR Intelligent Technology on October 6, 2024 and sell it today you would earn a total of  195.00  from holding ZEEKR Intelligent Technology or generate 7.75% return on investment over 90 days.

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

ZEEKR Intelligent Technology  vs.  Cadence Design Systems

ZEEKR Intelligent

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Cadence Design Systems

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Design Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cadence Design unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZEEKR Intelligent and Cadence Design

The main advantage of trading using opposite ZEEKR Intelligent and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZEEKR Intelligent position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.

The idea behind ZEEKR Intelligent Technology and Cadence Design Systems 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..