Correlation Between ZEEKR Intelligent and SES AI

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

Diversification Opportunities for ZEEKR Intelligent and SES AI

-0.6

Correlation Coefficient

ZEEKR Intelligent  SES AI

Excellent diversification

The 3 months correlation between ZEEKR and SES is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp 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 SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and SES AI go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and SES AI

Allowing for the 90-day total investment horizon ZEEKR Intelligent is expected to generate 1.29 times less return on investment than SES AI. But when comparing it to its historical volatility, ZEEKR Intelligent Technology is 1.63 times less risky than SES AI. It trades about 0.23 of its potential returns per unit of risk. SES AI Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  32.00  in SES AI Corp on September 15, 2024 and sell it today you would earn a total of  9.00  from holding SES AI Corp or generate 28.13% return on investment over 90 days.

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

ZEEKR Intelligent Technology  vs.  SES AI Corp

ZEEKR Intelligent

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

SES AI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES AI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ZEEKR Intelligent and SES AI

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

The idea behind ZEEKR Intelligent Technology and SES AI Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.