Correlation Between ZEEKR Intelligent and Stellantis

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

Diversification Opportunities for ZEEKR Intelligent and Stellantis

-0.35

Correlation Coefficient

ZEEKR Intelligent  Stellantis

Very good diversification

The 3 months correlation between ZEEKR and Stellantis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV 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 Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Stellantis go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Stellantis

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 1.78 times more return on investment than Stellantis. However, ZEEKR Intelligent is 1.78 times more volatile than Stellantis NV. It trades about -0.03 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.07 per unit of risk. If you would invest  2,825  in ZEEKR Intelligent Technology on December 29, 2024 and sell it today you would lose (399.00) from holding ZEEKR Intelligent Technology or give up 14.12% of portfolio value over 90 days.

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

ZEEKR Intelligent Technology  vs.  Stellantis NV

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 latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Stellantis NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellantis NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ZEEKR Intelligent and Stellantis

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

The idea behind ZEEKR Intelligent Technology and Stellantis NV 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.