Correlation Between ZEEKR Intelligent and Tesla

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

Diversification Opportunities for ZEEKR Intelligent and Tesla

0.42

Correlation Coefficient

ZEEKR Intelligent  Tesla

Very weak diversification

The 3 months correlation between ZEEKR and Tesla is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Tesla go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Tesla

Allowing for the 90-day total investment horizon ZEEKR Intelligent is expected to generate 2.32 times less return on investment than Tesla. In addition to that, ZEEKR Intelligent is 2.42 times more volatile than Tesla Inc. It trades about 0.04 of its total potential returns per unit of risk. Tesla Inc is currently generating about 0.21 per unit of volatility. If you would invest  35,000  in Tesla Inc on September 12, 2024 and sell it today you would earn a total of  5,099  from holding Tesla Inc or generate 14.57% return on investment over 90 days.

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

ZEEKR Intelligent Technology  vs.  Tesla Inc

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 unfluctuating forward-looking signals, ZEEKR Intelligent disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tesla Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZEEKR Intelligent and Tesla

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

The idea behind ZEEKR Intelligent Technology and Tesla Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.