Correlation Between ZEEKR Intelligent and Xpeng

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

Diversification Opportunities for ZEEKR Intelligent and Xpeng

0.21

Correlation Coefficient

ZEEKR Intelligent  Xpeng

Modest diversification

The 3 months correlation between ZEEKR and Xpeng is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng 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 Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Xpeng go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Xpeng

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to under-perform the Xpeng. But the stock apears to be less risky and, when comparing its historical volatility, ZEEKR Intelligent Technology is 1.03 times less risky than Xpeng. The stock trades about -0.04 of its potential returns per unit of risk. The Xpeng Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,263  in Xpeng Inc on December 27, 2024 and sell it today you would earn a total of  757.00  from holding Xpeng Inc or generate 59.94% return on investment over 90 days.

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

ZEEKR Intelligent Technology  vs.  Xpeng Inc

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 unfluctuating 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.

Xpeng Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xpeng Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Xpeng showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZEEKR Intelligent and Xpeng

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

The idea behind ZEEKR Intelligent Technology and Xpeng 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.