Correlation Between Full Truck and El Puerto
Can any of the company-specific risk be diversified away by investing in both Full Truck and El Puerto 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 Full Truck and El Puerto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Full Truck Alliance and El Puerto de, you can compare the effects of market volatilities on Full Truck and El Puerto 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 Full Truck with a short position of El Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full Truck and El Puerto.
Diversification Opportunities for Full Truck and El Puerto
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Full and ELPQF is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and El Puerto de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Puerto de and Full Truck 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 Full Truck Alliance are associated (or correlated) with El Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Puerto de has no effect on the direction of Full Truck i.e., Full Truck and El Puerto go up and down completely randomly.
Pair Corralation between Full Truck and El Puerto
Considering the 90-day investment horizon Full Truck Alliance is expected to generate 1.88 times more return on investment than El Puerto. However, Full Truck is 1.88 times more volatile than El Puerto de. It trades about 0.16 of its potential returns per unit of risk. El Puerto de is currently generating about -0.08 per unit of risk. If you would invest 903.00 in Full Truck Alliance on September 23, 2024 and sell it today you would earn a total of 229.00 from holding Full Truck Alliance or generate 25.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Full Truck Alliance vs. El Puerto de
Performance |
Timeline |
Full Truck Alliance |
El Puerto de |
Full Truck and El Puerto Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Full Truck and El Puerto
The main advantage of trading using opposite Full Truck and El Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full Truck position performs unexpectedly, El Puerto 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 El Puerto will offset losses from the drop in El Puerto's long position.Full Truck vs. Dubber Limited | Full Truck vs. Advanced Health Intelligence | Full Truck vs. Danavation Technologies Corp | Full Truck vs. BASE Inc |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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