Correlation Between ZEEKR Intelligent and Toyota

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

Diversification Opportunities for ZEEKR Intelligent and Toyota

-0.53

Correlation Coefficient

ZEEKR Intelligent  Toyota

Excellent diversification

The 3 months correlation between ZEEKR and Toyota is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Toyota Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor 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 Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Toyota go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Toyota

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to under-perform the Toyota. In addition to that, ZEEKR Intelligent is 6.1 times more volatile than Toyota Motor. It trades about -0.06 of its total potential returns per unit of risk. Toyota Motor is currently generating about -0.12 per unit of volatility. If you would invest  17,603  in Toyota Motor on August 30, 2024 and sell it today you would lose (631.00) from holding Toyota Motor or give up 3.58% of portfolio value over 90 days.

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

ZEEKR Intelligent Technology  vs.  Toyota Motor

ZEEKR Intelligent

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZEEKR Intelligent Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Toyota Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toyota Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with ZEEKR Intelligent and Toyota

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

The idea behind ZEEKR Intelligent Technology and Toyota Motor 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.