Correlation Between ZEEKR Intelligent and Thor Industries

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

Diversification Opportunities for ZEEKR Intelligent and Thor Industries

-0.65

Correlation Coefficient

ZEEKR Intelligent  Thor Industries

Excellent diversification

The 3 months correlation between ZEEKR and Thor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Thor Industries go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Thor Industries

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 1.74 times more return on investment than Thor Industries. However, ZEEKR Intelligent is 1.74 times more volatile than Thor Industries. It trades about 0.04 of its potential returns per unit of risk. Thor Industries is currently generating about -0.12 per unit of risk. If you would invest  2,887  in ZEEKR Intelligent Technology on December 17, 2024 and sell it today you would earn a total of  121.00  from holding ZEEKR Intelligent Technology or generate 4.19% 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.  Thor Industries

ZEEKR Intelligent

Risk-Adjusted Performance

Weak

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 weak forward-looking signals, ZEEKR Intelligent may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Thor Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ZEEKR Intelligent and Thor Industries

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

The idea behind ZEEKR Intelligent Technology and Thor Industries 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.