Correlation Between ZEEKR Intelligent and Lucid

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

Diversification Opportunities for ZEEKR Intelligent and Lucid

-0.67

Correlation Coefficient

ZEEKR Intelligent  Lucid

Excellent diversification

The 3 months correlation between ZEEKR and Lucid is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ZEEKR Intelligent Technology and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of ZEEKR Intelligent i.e., ZEEKR Intelligent and Lucid go up and down completely randomly.

Pair Corralation between ZEEKR Intelligent and Lucid

Allowing for the 90-day total investment horizon ZEEKR Intelligent Technology is expected to generate 2.0 times more return on investment than Lucid. However, ZEEKR Intelligent is 2.0 times more volatile than Lucid Group. It trades about -0.06 of its potential returns per unit of risk. Lucid Group is currently generating about -0.12 per unit of risk. If you would invest  2,652  in ZEEKR Intelligent Technology on August 30, 2024 and sell it today you would lose (408.00) from holding ZEEKR Intelligent Technology or give up 15.38% of portfolio value over 90 days.

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

ZEEKR Intelligent Technology  vs.  Lucid Group

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.

Lucid Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ZEEKR Intelligent and Lucid

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

The idea behind ZEEKR Intelligent Technology and Lucid Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .