Correlation Between ZEEKR Intelligent and Zapp Electric

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

Diversification Opportunities for ZEEKR Intelligent and Zapp Electric

0.27

Correlation Coefficient

ZEEKR Intelligent  Zapp Electric

Modest diversification

The 3 months correlation between ZEEKR and Zapp is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Zapp Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapp Electric Vehicles 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 Zapp Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapp Electric Vehicles has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Zapp Electric go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Zapp Electric

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 0.65 times more return on investment than Zapp Electric. However, ZEEKR Intelligent Technology is 1.53 times less risky than Zapp Electric. It trades about -0.05 of its potential returns per unit of risk. Zapp Electric Vehicles is currently generating about -0.07 per unit of risk. If you would invest  3,230  in ZEEKR Intelligent Technology on December 26, 2024 and sell it today you would lose (614.00) from holding ZEEKR Intelligent Technology or give up 19.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ZEEKR Intelligent Technology  vs.  Zapp Electric Vehicles

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 weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Zapp Electric Vehicles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zapp Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ZEEKR Intelligent and Zapp Electric

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

The idea behind ZEEKR Intelligent Technology and Zapp Electric Vehicles 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.