Correlation Between Apple and Full Truck
Can any of the company-specific risk be diversified away by investing in both Apple and Full Truck 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 Apple and Full Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Full Truck Alliance, you can compare the effects of market volatilities on Apple and Full Truck 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 Apple with a short position of Full Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Full Truck.
Diversification Opportunities for Apple and Full Truck
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Full is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Full Truck Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full Truck Alliance and Apple 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 Apple Inc are associated (or correlated) with Full Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full Truck Alliance has no effect on the direction of Apple i.e., Apple and Full Truck go up and down completely randomly.
Pair Corralation between Apple and Full Truck
Given the investment horizon of 90 days Apple is expected to generate 2.83 times less return on investment than Full Truck. But when comparing it to its historical volatility, Apple Inc is 1.87 times less risky than Full Truck. It trades about 0.07 of its potential returns per unit of risk. Full Truck Alliance is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 605.00 in Full Truck Alliance on November 3, 2024 and sell it today you would earn a total of 521.00 from holding Full Truck Alliance or generate 86.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Full Truck Alliance
Performance |
| Timeline |
| Apple Inc |
| Full Truck Alliance |
Apple and Full Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Full Truck
The main advantage of trading using opposite Apple and Full Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Full Truck 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 Full Truck will offset losses from the drop in Full Truck's long position.The idea behind Apple Inc and Full Truck Alliance 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.| Full Truck vs. Domo Inc | Full Truck vs. Oblong Inc | Full Truck vs. Kingsoft Cloud Holdings | Full Truck vs. Bm Technologies |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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