Correlation Between ZEEKR Intelligent and Nio

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

Diversification Opportunities for ZEEKR Intelligent and Nio

0.44

Correlation Coefficient

ZEEKR Intelligent  Nio

Very weak diversification

The 3 months correlation between ZEEKR and Nio is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A 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 Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Nio go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Nio

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to under-perform the Nio. In addition to that, ZEEKR Intelligent is 1.14 times more volatile than Nio Class A. It trades about -0.06 of its total potential returns per unit of risk. Nio Class A is currently generating about 0.0 per unit of volatility. If you would invest  469.00  in Nio Class A on December 25, 2024 and sell it today you would lose (19.00) from holding Nio Class A or give up 4.05% of portfolio value over 90 days.

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

ZEEKR Intelligent Technology  vs.  Nio Class A

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 unsteady 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.

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.

Pair Trading with ZEEKR Intelligent and Nio

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

The idea behind ZEEKR Intelligent Technology and Nio Class A 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.