Correlation Between ZEEKR Intelligent and LiveWire

Can any of the company-specific risk be diversified away by investing in both ZEEKR Intelligent and LiveWire 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 LiveWire 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 LiveWire Group, you can compare the effects of market volatilities on ZEEKR Intelligent and LiveWire 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 LiveWire. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZEEKR Intelligent and LiveWire.

Diversification Opportunities for ZEEKR Intelligent and LiveWire

0.13

Correlation Coefficient

ZEEKR Intelligent  LiveWire

Average diversification

The 3 months correlation between ZEEKR and LiveWire is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and LiveWire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveWire Group 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 LiveWire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveWire Group has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and LiveWire go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and LiveWire

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 0.73 times more return on investment than LiveWire. However, ZEEKR Intelligent Technology is 1.38 times less risky than LiveWire. It trades about 0.05 of its potential returns per unit of risk. LiveWire Group is currently generating about -0.28 per unit of risk. If you would invest  2,614  in ZEEKR Intelligent Technology on December 2, 2024 and sell it today you would earn a total of  71.00  from holding ZEEKR Intelligent Technology or generate 2.72% return on investment over 90 days.

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

ZEEKR Intelligent Technology  vs.  LiveWire Group

ZEEKR Intelligent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

LiveWire Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days LiveWire Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ZEEKR Intelligent and LiveWire

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

The idea behind ZEEKR Intelligent Technology and LiveWire Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.