Correlation Between ICU Medical and ZEEKR Intelligent

Can any of the company-specific risk be diversified away by investing in both ICU Medical and ZEEKR Intelligent 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 ICU Medical and ZEEKR Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ICU Medical and ZEEKR Intelligent Technology, you can compare the effects of market volatilities on ICU Medical and ZEEKR Intelligent 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 ICU Medical with a short position of ZEEKR Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and ZEEKR Intelligent.

Diversification Opportunities for ICU Medical and ZEEKR Intelligent

0.43

Correlation Coefficient

ICU Medical  ZEEKR Intelligent

Very weak diversification

The 3 months correlation between ICU and ZEEKR is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and ZEEKR Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEEKR Intelligent and ICU Medical 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 ICU Medical are associated (or correlated) with ZEEKR Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZEEKR Intelligent has no effect on the direction of ICU Medical i.e., ICU Medical and ZEEKR Intelligent go up and down completely randomly.

Pair Corralation between ICU Medical and ZEEKR Intelligent

Given the investment horizon of 90 days ICU Medical is expected to under-perform the ZEEKR Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, ICU Medical is 4.08 times less risky than ZEEKR Intelligent. The stock trades about -0.02 of its potential returns per unit of risk. The ZEEKR Intelligent Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,618  in ZEEKR Intelligent Technology on August 30, 2024 and sell it today you would earn a total of  626.00  from holding ZEEKR Intelligent Technology or generate 38.69% return on investment over 90 days.

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

ICU Medical  vs.  ZEEKR Intelligent Technology

ICU Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ICU Medical is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with ICU Medical and ZEEKR Intelligent

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

The idea behind ICU Medical and ZEEKR Intelligent Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.